Problem

For the following questions, circle the best response. Answers are at the end of this chap...

For the following questions, circle the best response. Answers are at the end of this chapter.

If both the fixed costs associated with a product and the variable costs (as a percentage of sales dollars) decrease, what will be the effect on the contribution margin ratio and the break-even point, respectively?

a. Decrease, increase.

b. Increase, decrease.

c. Decrease, decrease.

d. Increase, increase.

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