Question: The variable costs for your widgets has gone from $3 each to $4 each due to a shortage of components from your most trusted vendors.

The variable costs for your widgets has gone from $3 each to $4 each due to a shortage of components from your most trusted vendors. You dont want to change, as you have tried other suppliers and the quality just isnt as good. If you plan to sell 500 widgets this month at $10 each, how much will this change in variable cost affect your contribution margin?

Group of answer choices

$1000 lower

$500 lower

$500 higher

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