Which of the following is true regarding the contribution margin ratio of a company that produces only a single product? Multiple Choice The contribution margin ratio multiplied by the selling price per unit equals the contribution margin per unit. The contribution margin ratio will decline as unit sales decline. As fixed expenses decrease, the contribution margin ratio increases. The contribution margin ratio equals the selling price per unit less the variable expense ratio.

What happens to the contribution margin ratio of a company that produces only a single product is that the contribution margin ratio multiplied by the selling price per unit equals the contribution margin per unit

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andromache andromache · Answer 2 · 2022-03-25T15:50:16+01:00

The statement that should be true for the contribution margin ratio should be that it should be multiplied by the selling price per unit equals the contribution margin per unit.

What is the contribution margin?

The contribution margin shows the difference between the selling price and the variable cost.

In mathematically,

Contribution margin = Selling price - variable cost

And, the contribution margin ratio is

= Contribution margin / selling price

Therefore, the above statement should be correct.

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