Question

If both fixed expenses and the selling price per unit increase while variable costs per unit are​ unchanged, which of the following statements is true​? A. Breakeven point in units could​ increase, decrease, or remain the same. B. Breakeven point in units remains unchanged. C. Breakeven point in units decreases. D. Breakeven point in units increases.

Answer 1

Answer:

A

Explanation:

the sales price increase and because the variable cost are the same the contribution margin will increase, which lead to think the BEP is lower.

But, because the fixed cost also increase we cannot determinate where the new BEP Will be higher or lower. The fixed cost could increase so much that nulifies the increase in the contribution margin or even be higher enought that the BEP goes higher.

So Option A is the only true statment.