Asked by
Valérie labbé
on Nov 07, 2024
Verified
To increase the contribution margin a firm must either _____ or _____.
A) Increase its sales price; increase its fixed cost per unit.
B) Increase its sales price; decrease its variable cost per unit.
C) Increase its sales price; decrease its fixed cost per unit.
D) Increase its variable cost per unit; decrease its fixed cost per unit.
E) Decrease its variable cost per unit; decrease its fixed cost per unit.
Contribution Margin
The surplus of sales revenue over the variable production costs, showing how much revenue aids in covering fixed expenses and producing profit.
Sales Price
The amount of money for which a product or service is sold in the marketplace.
Variable Cost
Expenses that change in proportion to the level of production or business activity, unlike fixed costs which remain constant.
- Comprehend the idea and consequences of fixed and variable expenses in business activities.
Verified Answer
MD
Learning Objectives
- Comprehend the idea and consequences of fixed and variable expenses in business activities.