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1. Identify the cost driver that is changing. 2. Calculate the new fixed and variable costs per unit. 3. Compare the new costs to the original costs. If the cost driver is changing, then the costs will change.
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When fixed costs increase and all other variables remain unchanged, the contribution margin will _____. A. remain unchanged B. increase C. decrease D. increase variable costs per unit
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This question says that fixed cost increases on all other variables stay the same. What did the contribution do? The correct answer is remained unchanged because the contribution imagine is basically difference between the sales on the variable costs and the options options. The easy cost to the contribution is sales minus variable cost. So it is unaffected by the amount off fixed cost. He doesn't affect on the contribution because the sales and variable questions matter what the fixed costs are. When the fixed cost increases, imagine it. When the fixed costs increase in all the variables, the culture will not have an effect on Torino change, because the fixed costs have no effect or needs on it. That's why it's still the same.
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50.Within the relevant range, if there is a change in the level of the cost driver then
a. total fixed costs and total variable costs will change.
b. total fixed costs and total variable costs will remain the same.
c. total fixed costs will remain the same and total variable costs will change.
d. total fixed costs will change and total variable costs will remain the same.
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