Michael Vick has written a self improvement book that has the following cost cha

Question

Michael Vick has written a self improvement book that has the following cost characteristics: Selling Price $16.00 per book Variable cost per unit: Production $4.00 Selling & administrative 2.00 Fixed costs: Production $88,000 per year Selling & administrative 18,000 per year Assume the variable production cost and the price were both cut by $2.00 per unit. Which of the following would change? a)Contribution margin per unit b) Contribution margin ratio c) Breakeven point in units d) Total fixed costs

Explanation / Answer

b) Contribution margin

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