Basics of the contribution margin ratio
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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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:
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