Asked by
Beauty Time with HARITA
on Oct 23, 2024Verified
Which of the following will increase a company's break-even point?
A) Increasing the contribution margin per unit
B) Increasing the variable cost per unit
C) Reducing the company's total fixed costs
D) Increasing the selling price per unit
Contribution Margin
A financial metric that represents the difference between a product's price and its variable costs, indicating how much contributes to covering fixed costs and generating profit.
Variable Cost
A financial term describing expenses that vary directly with the production volume, such as materials and labor.
Fixed Costs
Expenses that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums.
- Evaluate cost frameworks to recognize how shifts in fixed and variable costs influence profit margins and break-even levels.
Verified Answer
GS
Learning Objectives
- Evaluate cost frameworks to recognize how shifts in fixed and variable costs influence profit margins and break-even levels.