(Solution) If The Selling Price Per Unit Were To Drop $2, From $100 To $98, The Sales Volume Were To Increase 500 Units To 4,500 Units Per Month, And... | Snapessays.com


(Solution) If the selling price per unit were to drop $2, from $100 to $98, the sales volume were to increase 500 units to 4,500 units per month, and...


1. If the selling price per unit were to drop $2, from $100 to $98, the sales volume were to increase 500 units to 4,500 units per month, and advertising expense were to increase by $1,000:

 

a. the break-even point would increase.

 

b. the break-even point would decrease.

 

c. the contribution margin ratio would increase.

 

d. operating income would decrease.

 

 

2. The contribution margin ratio always decreases when the:

 

a. breakeven point decreases.

 

b. fixed expenses increase.

 

c. selling price increases and the variable costs remain constant.

 

d. variable cost increase and the selling price remains constant.

 


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This question was answered on: May 23, 2022

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