Question 1
If sales price and the unit variable cost remain constant and fixed costs decrease, contribution margin will
◦ remain the same.
◦ increase.
◦ vary, depending on the circumstances.
◦ decrease.
Question 2
When both fixed and variable costs go down,
◦ revenue goes up.
◦ operating income goes down.
◦ contribution margin goes down.
◦ operating income goes up.