ACCT 2301 CH 4 Breakeven units Concepts

If the selling price per unit increases, the break-even point in units will

Decrease

If variable costs per unit decrease, sales volume at the break-even point will

Decrease

If a company increases fixed costs, then the breakeven point will be lower.

False

If one increases variable costs per unit, the break-even point will decrease.

False

If variable costs per unit increase, then the breakeven point will decrease.

False

The breakeven point in CVP analysis is defined as:

Fixed costs divided by the contribution margin per unit

If fixed costs increase, the break-even point in units will

Increase

Which of the following will increase a company's breakeven point?

Increasing variable cost per unit

The breakeven point is the activity level where:

Revenues equal the sum of variable and fixed costs

The breakeven point decreases if:

Total fixed costs decreases

The break-even point is where total sales revenue equals total cost.

True

The contribution margin ratio can be calculated by subtracting the variable cost ratio from one.

True

If the contribution margin per unit decreases, the break-even point in units

Will increase

At the breakeven point

total contribution margin equals total fixed cost.