Question

if a company increases its selling price by $2 per unit due to an increase in its variable labor cost of $2 per unit, the break-even point in units will:

Answer 1

Answer:

Not change

Explanation:

In the case when the company rise its selling price by $2 per unit that results in an increase in variable labor cost of $2 per unit so the break even unit would remain unchanged or same as the contribution margin would remain same or unchanged

Therefore there will be no effect

Hence, the break even point in units will not change