Which of the following is true regarding the contribution margin ratio of a sing

Question

Which of the following is true regarding the contribution margin ratio of a single-product company?

A. The contribution margin ratio multiplied by the variable expense per unit equals the contribution margin per unit.
B. As fixed expenses decrease, the contribution margin ratio increases.
C. If sales increase, the dollar increase in net operating income can be computed by multiplying the contribution margin ratio by the dollar increase in sales.
D. The contribution margin ratio increases as the number of units sold increases.

Explanation / Answer

C. If sales increase, the dollar increase in net operating income can be computed by multiplying the contribution margin ratio by the dollar increase in sales

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