Answer:
A 7% increase in selling price.
Explanation:
Contribution margin refers to the difference between selling price and variable cost.
Contribution margin:
= Selling price - Variable cost
Net income:
= Contribution margin - Fixed cost
(i) 14% increase in variable cost:
It cannot, because it will decrease the contribution margin.
(ii) 17% decrease in fixed cost:
It cannot affect the contribution margin.
(iii) 15% decrease in selling price:
No, it will reduce the contribution margin.
(iv) 7% increase in selling price:
Yes, it will increase the contribution margin since there is an increase in the selling price.
(v) 23% increase in the number of units sold:
No, it will not impact the selling price or variable cost.
