Which of the following would produce the largest increase in the contribution margin per unit? A 14% increase in variable cost. A 17% decrease in fixed cost. A 15% decrease in selling price. A 7% increase in selling price. A 23% increase in the number of units sold.

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.

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.

answer; tech (a) is correct;