If Fixed Costs Are $561,000 and the Unit Contribution Margin

question 9

Multiple Choice

If fixed costs are $561,000 and the unit contribution margin is $8.00, what is the break-even point in units if variable costs are decreased by $0.50 a unit?

• A) 66,000
• B) 70,125
• C) 74,800
• D) 60,000

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Definitions:

Type II Error

The incorrect failure to reject a false null hypothesis, also known as a "false negative."

Inverse Relationship

A relationship between two variables where an increase in one variable leads to a decrease in the other, and vice versa.

Accepting

In statistical hypothesis testing, referring to the decision not to reject the null hypothesis based on the evidence provided by the test results.

Failing to Reject

In hypothesis testing, it is the scenario where there isn’t enough evidence to reject the null hypothesis.