Asked by Osano Enoch on May 19, 2024

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Which of the following conditions would cause the break-even point to decrease?

A) total fixed costs increase
B) unit selling price decreases
C) unit variable cost decreases
D) unit variable cost increases

Break-even Point

The point at which total costs equal total revenues, indicating that a business is neither making a profit nor a loss.

Fixed Costs

Costs that do not change in total with changes in activity level over a relevant range, such as rents, salaries, and insurance premiums.

  • Analyze the influence of alterations in fixed spendings, variable spendings, and sales pricing on the analysis of break-even points.
  • Identify the factors that cause the break-even point to increase or decrease.
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Daniel VargheseMay 22, 2024
Final Answer :
C
Explanation :
If the unit variable cost decreases, the break-even point will decrease because there is less cost to cover before making a profit.