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.