1. Fixed costs:
A. reflect the change in a variable when one more unit of output is produced.
B. can be ignored in scenario analysis since they are constant over the life of a project.
C. are subtracted from sales to compute the contribution margin.
D. change as the quantity of output produced changes.
E. are constant over the short-run regardless of the quantity of output produced.
2. The contribution margin must increase as:
A. the gap between the sales price and the variable cost per unit widens.
B. both the sales price and variable cost per unit increase.
C. the sales price minus the fixed cost per unit increases.
D. the fixed cost per unit declines.
E. the sales price per unit declines.