Question

After the level of volume exceeds the break-even point

a. a contribution margin ratio increases
b. the total contribution margin exceeds the total fixed costs
c. total fixed costs per unit will remain constant
d. the total contribution margin will turn from negative to positive

Answer 1

The total contribution margin will turn from negative to positive once the level of volume exceeds the break-even point.

Step-by-step explanation:

The correct answer is d. the total contribution margin will turn from negative to positive.

Break-even point is the level of output or sales at which total revenue equals total cost, resulting in zero profit. Once the level of volume exceeds the break-even point, a firm starts making profits. Therefore, the correct answer is d. the total contribution margin will turn from negative to positive.