Once the break-even point is reached, which of the following statements is true
A)The total contribution margin changes from negative to positive.
B)Variable expenses will remain constant in total.
C)Net income will increase by the unit contribution margin for each additional item sold.
D)The contribution margin ratio begins to decrease.

Question

Quizplus · Accepted Answer

Once the break-even point is reached, net income will increase by the unit contribution margin for each additional item sold. The total contribution margin becomes equal to fixed expenses, hence, it is not negative anymore. Variable expenses will remain constant in total as they do not change with increase or decrease in the number of items sold. The contribution margin ratio remains constant unless there is a change in the sales mix or selling price.

Once the Break-Even Point Is Reached, Which of the Following