If the contribution margin ratio increases by 10% and all else remains the same, what isthe effect on net income?O a.net income will increase by 20%b. more information is need to answer this questionC.net income will increased. net income will increase by 10%

We know that, fixed cost will remain constant irrespective of the level of production, But the…

If the contribution margin ratio increases by 10% and all else remains the same, what is the effect on net income? a. net income will increase by 20% O b. more information is need to answer this question O C. net income will increase d. net income will increase by 10%

If the contribution margin ratio increases by 10% and all else remains the same, what is the effect on net income? a. net income will increase by 20% O b. more information is need to answer this question O C. net income will increase d. net income will increase by 10%

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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Question

If the contribution margin ratio increases by 10% and all else remains the same, what is
the effect on net income?
O a.
net income will increase by 20%
b. more information is need to answer this question
C.
net income will increase
d. net income will increase by 10%

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When the sales price per unit decreases, the contribution margin per unit A. decreases B. increases OC. increases proportionately OD. remains the same 13