Accounting Question?

Question

What stays constant when the price per unit changes?

a.Demand
b.Contribution Margin Per Unit
c.Total Fixed Cost
d.Profit

Answer 1

Hi there

so here we are considering which from the four variable you gave will remain constant when the price per unit changes. Now, as re Demand, if price decrease, demand increases and vice versa (so does not remain constant)

Contribution margin per unit also does not remain constant
and profit will e.g increase when price increases.

The only variable that remains constant is the total fixed cost, which as the word implies it remains FIXED no matter the fluctuations

Answer 2

c.