Contribution margin?

other things equal, the larger the contribution margin (p-v), the smaller is the breakeven quantity.

True or False?

Answer:
Contribution margin analysis is a relatively simple tool afforded by cost/volume/profit analysis. In simplest terms, the contribution margin is total revenue minus total variable cost. This difference can be expressed as a percentage of total revenue. A company's contribution margin can be expressed as the percentage of each sale that remains after the variable costs are subtracted. Given the contribution margin, a manager can make better decisions about whether to add or subtract a product line, about how to price a product or service, and about how to structure sales commissions or bonuses. The contribution margin is computed using a special type of income statement that has been reformatted to group together a business's fixed and variable costs.

Here, we see that each unit is contributing higher share towards the profit, and break even is calculated by dividing the total fixed cost by the contribution margin.As the contribution margin per unit is more obviously the number of units required for break even will be smaller.
The statement is true.
true - the more money each unit earns, the less it will take to cover fixed costs

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