A $2.00 increase in a product's variable expense per unit accompanied by a $2.00 increase in its selling price per unit will:
A) decrease the degree of operating leverage.
B) decrease the contribution margin.
C) have no effect on the break-even volume.
D) have no effect on the contribution margin ratio.

Question

Quizplus · Accepted Answer

A $2.00 increase in both variable expense and selling price per unit will not change the contribution margin per unit, thus the break-even volume remains unchanged.

A $200 Increase in a Product's Variable Expense Per Unit Accompanied