If Fixed Expenses Were the Same and Contribution Margin Per

question 149

Multiple Choice

If fixed expenses were the same and contribution margin per unit was cut in half, then the break?even point would _____.

• A)be cut in half
• B)double
• C)be the same
• D)be undeterminable

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Definitions:

Current Asset

Assets that are expected to be converted into cash, sold, or consumed within one year or the normal operating cycle of the business, whichever is longer.

Statement Of Financial Position

Another term for a balance sheet; it shows a company's assets, liabilities, and equity at a specific point in time.

Intangible Asset

An asset that lacks physical substance but provides economic benefits to its owner, such as trademarks, patents, and goodwill.

Retained Earnings

Retained earnings refer to the portion of net income that is retained by the corporation rather than distributed to its shareholders as dividends, typically used for reinvestment in the business or to pay down debt.