which of the following conditions would cause the break-even point to decrease? a.unit variable cost decreases b.unit selling price decreases c.unit variable cost increases d.total fixed costs increase

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21-11-2022
Business

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which of the following conditions would cause the break-even point to decrease? a.unit variable cost decreases b.unit selling price decreases c.unit variable cost increases d.total fixed costs increase

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pstnonsonjoku pstnonsonjoku · Answer 1 · 2022-12-08T17:03:53+01:00

The condition that would cause the break-even point to decrease is unit variable cost decreases . This is shown in the answer that is in option A.

What would cause the break even point to decrease?

The breakeven point is the number of units produced and sold at which net income is zero.

Breakeven point = fixed cost / price – variable cost per unit

Assume the initial: fixed cost is $100,price = $10 variable cost = $5 Breakeven point = 100 / (10 - 5) = 20

Breakeven point when variable cost decreases to $3 = 100 / (10 - 3) = 14.29

Breakeven point when unit selling price decreases to $9 = 100 / (9 - 5) = 25

Breakeven point when unit variable cost increases to $8 = 100 / (10 - 8) = 50

Breakeven point when fixed cost increases to $200 = 200 / (10 - 5) = 40

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