Asked by Daniel Klucker on May 25, 2024

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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.
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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.