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What happens to contribution margin per unit

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Reference no: EM13116384

Write answers for below questions in details

o Explain the components of cost-volume-profit analysis. 

o What does each of the components mean? 

o Based on the formulas you have reviewed, what happens to contribution margin per unit when unit selling prices increase? Illustrate your explanation with an example from a fictitious company of how an increase in unit selling prices might affect contribution margin. 

o When fixed costs decrease, what does this do for sales? Illustrate your explanation with an example from a fictitious company. 

o Define contribution ratios. 

o What happens to contribution ratios as one of the components changes? 

 

 

Reference no: EM13116384

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