Which of the following is true regarding the contribution, Ask an Expert

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

1. As fixed expenses decrease, the contribution margin ratio increases.

2. The contribution margin ratio multiplied by the variable expense per unit equals the contribution margin per unit.

3. 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.

4. The contribution margin ratio increases as the number of units sold increases.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M995593

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