Question

    Which of the following conditions would cause the

    break-even point to increase?
    A Total Fixed cost decrease Correct Answer Incorrect Answer
    B Unit selling price increases Correct Answer Incorrect Answer
    C Unit variable cost decreases Correct Answer Incorrect Answer
    D Unit variable cost increases Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    BEP = Fixed Costs/ Contribution per unit, Decrease in denominator would increase the Break-even point Contribution per unit would go down with increase in variable cost per unit as Contribution = Sales – variable cost

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