What Is the Effect on Break-Even Level of Revenues for Each

question 19

Multiple Choice

What is the effect on break-even level of revenues for each dollar of increase in fixed costs plus depreciation for a firm with 70 percent variable costs?

• A)an increase of $0.30.
• B)an increase of $1.00.
• C)an increase of $1.43.
• D)an increase of $3.33

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Definitions:

Efficiency

The ability to achieve a desired result or work output with minimum wasted effort or expense.

Equity

A measure of ownership in a company or asset, typically represented by shares that entitle holders to a proportion of the company's profits.

Voluntary Exchange

A transaction where two parties mutually agree to trade goods, services, or resources, typically to the perceived benefit of both.

Marginal Rate

The rate of change in cost, output, or benefit as a result of a one-unit increase in an input.