Select the Correct Statement Regarding Break-Even Point Analysis

question 71

Multiple Choice

Select the correct statement regarding break-even point analysis.

• A) The break-even point in sales dollars equals total fixed costs divided by contribution margin per unit.
• B) An increase in fixed costs causes the break-even point to increase.
• C) An increase in contribution margin per unit causes the break-even point in units to increase.
• D) A decrease in the variable cost per unit causes the break-even point in units to increase.

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Definitions:

Financing Activity

Transactions that result in changes to the size and composition of the equity capital or borrowings of a company, as reported in the cash flow statement.

Financing Activities

Transactions and events that involve changes in the size and composition of the equity and borrowings of a company.

Cash Inflow

The total amount of money being transferred into a business, typically from operations, investments, or financing.

Bonds Payable

Long-term liabilities represented by bonds that a company is obligated to repay at a future date.