If Variable Costs Per Unit Increased Because of an Increase

question 45

Multiple Choice

If variable costs per unit increased because of an increase in hourly wage rates, the break-even point would

• A) decrease
• B) increase
• C) remain the same
• D) increase or decrease, depending on the percentage increase in wage rates

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Definitions:

New Project

A project that involves starting a new task, product, service, or process, which has not been undertaken by the organization before.

Flotation Costs

The expenses incurred by a company in issuing new securities, including legal, administrative, underwriting fees, and other associated costs.

Debt-Equity Ratio

An economic indicator showing the comparative mix of owner's equity and loans in funding a company's assets.

External Financing

Funds raised from outside the business, typically through borrowing or the issuance of equity.