All other things the same,which of the following would be true of the contribution margin and variable costs of a company with high fixed costs and low variable costs as compared to a company with low fixed costs and high variable costs? $$\begin{array} { | l | c l | }
\hline & \text { Contribution Margin } & \text { Variable Costs } \
\hline \text { A. } & \text { Higher } & \text { Higher } \
\hline \text { B. } & \text { Lower } & \text { Higher } \
\hline \text { C. } & \text { Higher } & \text { Lower } \
\hline \text { D. } & \text { Lower } & \text { Lower } \
\hline
\end{array}$$
A) Option A
B) Option B
C) Option C
D) Option D

Question

All other things the same,which of the following would be true of the contribution margin and variable costs of a company with high fixed costs and low variable costs as compared to a company with low fixed costs and high variable costs? $$\begin{array} { | l | c l | } 
\hline & \text { Contribution Margin } & \text { Variable Costs } \
\hline \text { A. } & \text { Higher } & \text { Higher } \
\hline \text { B. } & \text { Lower } & \text { Higher } \
\hline \text { C. } & \text { Higher } & \text { Lower } \
\hline \text { D. } & \text { Lower } & \text { Lower } \
\hline
\end{array}$$
A) Option A
B) Option B
C) Option C
D) Option D

Quizplus · Accepted Answer

A company with high fixed costs and low variable costs will have a higher contribution margin because the contribution margin is calculated as sales minus variable costs. Lower variable costs lead to a higher contribution margin.

All Other Things the Same,which of the Following Would Be