All else being equal, what happens to the unit contribution margin and the contribution margin ratio if the sales price per unit increases?
A Both unit contribution margin and contribution margin ratio increase.
B Unit contribution margin increases while contribution margin ratio decreases.
C Both unit contribution margin and contribution margin ratio decrease.
D Unit contribution margin decreases while contribution margin ratio increases.
The profit equation is:
A (Unit price × Q) – (Unit variable costs × Q) + Total fixed costs = Profit.
B (Unit price × Q) – (Unit variable costs × Q) – Total fixed costs = Profit.
C (Unit price × Q) + (Unit variable costs × Q) + Total fixed costs = Profit.
D (Unit price – Unit variable costs – Total fixed costs) × Q = Profit.
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