The Breakeven Point for a Service Organization Will Decrease If

question 45

Multiple Choice

The breakeven point for a service organization will decrease if:

• A) The variable cost ratio increases
• B) The mix of less profitable services increases
• C) The contribution margin ratio increases
• D) Fixed costs increase

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Definitions:

Revenues

The gross revenue stemming from the primary operational activities of a firm, particularly from selling products or services.

Supplies

Items that are used in the day-to-day operation of a business but do not directly become part of the finished product.

Fees Earned

Income received by a company or professional for services rendered.

Credit

A bookkeeping entry that increases liabilities or equity on the balance sheet or decreases an asset or expense account on the income statement.