Question

Which of the following would decrease unit contribution margin the most
a. 15% decrease in fixed costs
b. 15% increase in variable costs
C. 15% decrease in variable costs
d. 15% decrease in selling price​

Answer 1

Answer:

Option d.15% decrease in selling price is your answer

Explanation:

15% reduction in sales price. The business sells three chemicals: gasoline, septine, and tridol. Gasoline is the company's most profitable product; Tridol has little benefit.

Answer 2

Answer:

15% increase in variable costs would decrease the unit contribution margin the most.

correct option is 'b'

Explanation:

Since, unit contribution margin will get affected mostly by the raw material costs. And the raw material costs are included in the 'Variable costs'. So, if the variable costs are increased as a manufacturer, your contribution margin diminishes.

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