Question

If a company is operating beyond its break-even point, sale of one more unit of product increases the company's profit by the amount of the unit contribution margin
a. True
b. False

Answer 1

Answer:

If a company is operating beyond its break-even point, sale of one more unit of products increases the company's profit by the amount of the unit contribution margin.

The correct answer is A

Explanation:

If a company operates beyond the break-even point, any sale of an additional unit increases the company's profit by the amount of the unit contribution margin. This is due to the fact that the fixed cost remains  constant and any increase in sale increases contribution and profit by the same amount.