All Else Equal, One Firm Will Have a Lower Breakeven

question 122

Multiple Choice

All else equal, one firm will have a lower breakeven point than another firm if

• A)its fixed costs are higher.
• B)its selling price of the product is higher.
• C)its variable operating cost per unit is higher.
• D)All of the above.
• E)None of the above.

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Definitions:

Expenses

Outflows or using up of assets as part of operations of a business to generate revenue.

Contribution Margin

The difference between sales revenue and variable costs of a product or service, indicating how much revenue contributes toward covering fixed costs and generating profit.

Sales

The total revenue generated from selling goods or services over a specific period of time.

Products

Items or goods that have been produced for sale or consumer use.