The Breakeven Point for a Service Organization Will Decrease If

question 20

Multiple Choice

The breakeven point for a service organization will decrease if:

• A) Volume increases
• B) The variable cost ratio decreases
• C) Fixed costs increase
• D) The contribution margin ratio decreases

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Definitions:

Net Private Domestic Investment

The total amount spent by businesses and firms in the economy on capital goods, minus depreciation.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.

Gross Private Domestic Investment

The total amount of private domestic investment in physical assets such as buildings, machinery, and equipment by businesses and individuals within a country.

Income Approach

A method of calculating GDP by adding up all incomes within the economy, including wages, interest, profits, and rents.