Assuming that the fixed cost do not change, with the sale of each additional unit (above the break-even point), net operating income will increase by the ____.

Question

Quizplus · Accepted Answer

The contribution margin per unit represents the amount that each additional unit contributes towards covering the fixed cost and generating a profit. Therefore, with the sale of each additional unit above the break-even point, net operating income will increase by the contribution margin per unit. The contribution margin ratio and sales price per unit do not directly reflect the incremental increase in net operating income from the sale of each additional unit, and fixed costs per unit do not change with the sale of additional units.

Assuming That the Fixed Cost Do Not Change, with the Sale