Multiple Choice
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A company has fixed costs of $900 and a per-unit contribution margin of $3. Which of the following statements is (are) true?
A. Each unit "contributes" $3 toward covering the fixed costs of $900.
B. The situation described is not possible and there must be an error.
C. Once the break-even point is reached, the company will make money at the rate of $3 per unit.
D. The firm will definately lose money in this situation.
E. Statements "A" and "C" are true.
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