Asked by Daniel Klucker on May 25, 2024
Verified
If variable costs per unit decreased because of a decrease in utility rates, the break-even point would
A) decrease
B) increase
C) remain the same
D) increase or decrease, depending on the percentage increase in utility rates
Variable Costs
Expenditures that adjust based on the quantity of production or the scale of sales.
Utility Rates
Charges imposed by utility companies for the use of services such as electricity, gas, water, and sewer.
- Investigate the implications of modifications in permanent costs, adjustable costs, and the selling figure on break-even point projections.
- Identify the variables responsible for the upward or downward movement of the break-even point.
Verified Answer
SN
Shykh NomanMay 29, 2024
Final Answer :
A
Explanation :
A decrease in variable costs per unit would result in a decrease in the total cost per unit, thus decreasing the break-even point.
Learning Objectives
- Investigate the implications of modifications in permanent costs, adjustable costs, and the selling figure on break-even point projections.
- Identify the variables responsible for the upward or downward movement of the break-even point.