Asked by Hloni Nkolanyane on Apr 30, 2024
Verified
Charlotte Co. has budgeted salary increases to factory supervisors totaling 9%. If selling prices and all other cost relationships are held constant, next year's break-even point
A) will decrease by 9%
B) will increase by 9%
C) cannot be determined from the data given
D) will increase at a rate greater than 9%
Budgeted Salary
A predetermined amount of money allocated for salaries over a specific period, used for planning and controlling payroll expenses.
Break-even Point
The break-even point is the level of production or sales at which total revenues equal total expenses, resulting in neither profit nor loss.
- Study the repercussions of changing fixed costs, alterable costs, and market price on break-even point determinations.
- Understand how changes in variable costs and fixed costs affect operating income.
Verified Answer
BA
Batool AlsaeedMay 06, 2024
Final Answer :
C
Explanation :
The percentage increase in salary for factory supervisors does not necessarily translate to a percentage increase in total fixed costs or variable costs. Therefore, we cannot determine the impact on the break-even point without additional information.
Learning Objectives
- Study the repercussions of changing fixed costs, alterable costs, and market price on break-even point determinations.
- Understand how changes in variable costs and fixed costs affect operating income.