All else constant,as the variable cost per unit for a project increases,the:
A)contribution margin decreases.
B)sensitivity to fixed costs decreases.
C)project's net present value increases.
D)accounting break-even point decreases.
E)net profit increases.

Question

Quizplus · Accepted Answer

Contribution margin is the difference between revenue and variable costs. As the variable cost per unit increases, the contribution margin decreases. This means that each unit sold contributes less towards covering the fixed costs and generating a profit.

All Else Constant,as the Variable Cost Per Unit for a Project