The total contribution margin decreases if sales volume remains the same and which of the following occurs?
A)Variable expense per unit decreases.
B)Variable expense per unit increases.
C)Fixed expenses increase.
D)Fixed expenses decrease.

Question

Quizplus · Accepted Answer

Contribution margin is the difference between sales revenue and variable expenses. If the variable expense per unit increases, the contribution margin per unit will decrease, which will result in a decrease in the total contribution margin even if the sales volume remains the same.

The Total Contribution Margin Decreases If Sales Volume Remains the Same