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Bramble Inc
Bramble Inc. determined Its unit variable cost increased by 31.016. Which one of the following will NOT increase as a direct result?
total cot total variable costs contribution margin the beak ,even point It
A company has total fixed costs of $190000 and a contribution margin ratio of 40%.1-1 Now much safes are necessary to break even/
— $399000 ' $475000 r $76000 • $114000
Expert Solution
Total cost, Total Variable cost and Break even point will increase as a direct result of increase of variable cost while Contribution margin will decrease when the variable cost increases. So, the correct option is 3rd "Contribution Margin".
Computation of Breakeven Sales:
Breakeven Sales = Fixed Cost/Contribution Margin Ratio
= $190,000/40%
Breakeven Sales = $475,000
So, the correct option is 2nd "$475,000".
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