Respuesta :
Answer:
A) Increase Decrease
Explanation:
Contribution refers to excess of sales revenue over variable cost, mathematically expressed as;
Contribution = Sales - Variable Cost
Contribution Margin ratio(CMR) is given by
CMR = Contribution/Sales
The ratio is expressed in percentage and higher the ratio, better it is for a firm.
Breakeven Point(BEP) refers to that level of sales (in value or in units) at which there is no profit or loss. It is expressed as;
BEP = Fixed Cost/ Contribution per unit or also as Fixed cost/contribution margin ratio.
In the given case, price increase will not diminish sales. This means Contribution Margin ratio shall increase as sales price per unit has increased with units sold remaining the same. Owing to this, contribution shall increase which shall increase contribution margin ratio.
Similarly, the point of indifference i.e break even point will decrease as with increase in sales value, contribution per unit shall increase which shall cover fixed costs quicker than before.
