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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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