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East Company manufactures and sells a single product with a positive contribution margin. If the selling price and the variable expense per unit both increase 5% and fixed expenses do not change, what is the effect on the contribution margin per unit and the contribution margin ratio? 8. Contribution Contribution margin per unit margin ratio No change Increase Increase Increase No change Increase A) B) C) D) No change Decrease A. Option D B. Option A C. Option B X D. Option C

East Company manufactures and sells a single product with a positive contribution margin. If the selling price and the variable expense per unit both increase 5% and fixed expenses do not change, what is the effect on the contribution margin per unit and the contribution margin ratio? 8. Contribution Contribution margin per unit margin ratio No change Increase Increase Increase No change Increase A) B) C) D) No change Decrease A. Option D B. Option A C. Option B X D. Option C

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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East Company manufactures and sells a single product with a positive contribution margin. If the selling price and the variable expense per unit both increase 5% and fixed expenses do not change, what is the effect on the contribution margin per unit and the contribution margin ratio? 8. Contribution Contribution margin per unit margin ratio No change Increase Increase Increase No change Increase A) B) C) D) No change Decrease A. Option D B. Option A C. Option B X D. Option C
Transcribed Image Text:East Company manufactures and sells a single product with a positive contribution margin. If the selling price and the variable expense per unit both increase 5% and fixed expenses do not change, what is the effect on the contribution margin per unit and the contribution margin ratio? 8. Contribution Contribution margin per unit margin ratio No change Increase Increase Increase No change Increase A) B) C) D) No change Decrease A. Option D B. Option A C. Option B X D. Option C
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