Question: Can you please give the correct answer for this question and explain your reasoning? If total costs remain the same, the smaller the proportion of

Can you please give the correct answer for this question and explain your reasoning?

If total costs remain the same, the smaller the proportion of fixed costs in a firm's cost structure:

A.the greater the impact on profit from a percentage change in sales volume.

B.the smaller the impact a percentage change in sales volume will have on profit.

C.the lower the contribution margin.

D.the smaller the impact a percentage change in sales volume will have on profit AND the lower the contribution margin.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!