When a company experiences an increase in its variable per unit product costs, and no other changes occur, which of the following will happen?
A) Fixed costs will decrease by an amount proportional to the increase in variable costs.
B) Contribution margin will decline, profit will decline, and the break-even point will rise.
C) Contribution margin will remain the same despite changes in the variable cost structure
D) Contribution margin will increase, profit will decline, and the break-even point will drop.
Correct Answer:
Verified
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