How an increase in unit selling prices affect contribution

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Reference no: EM13136502

Write a 350- to 700-word paper that addresses the following:

• Explain the components of cost-volume-profit analysis.

• What does each of the components mean?

• Based on the formulas you have reviewed, what happens to contribution margin per unit when unit selling prices increase? Illustrate your explanation with an example from a fictitious company of how an increase in unit selling prices might affect contribution margin.

• When fixed costs decrease, what does this do for sales? Illustrate your explanation with an example from a fictitious company.

• Define contribution ratios.

• What happens to contribution ratios as one of the components changes?

Reference no: EM13136502

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