If the Variable Cost Per Unit Increases While the Sale

question 234

Multiple Choice

If the variable cost per unit increases while the sale price per unit and total fixed costs remain constant, which of the following statements is true?

• A)Breakeven point in units remains the same.
• B)Breakeven point in units decreases.
• C)Breakeven point in units increases.
• D)Contribution margin ratio increases.

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Definitions:

Regression Equation

An equation in mathematics employed to forecast the value of a dependent variable using one or more independent variables.

Unit Increase

A single increment or step up in quantity, size, or number in a given context.

Holding Constant

A method in analysis where certain variables are kept unchanged to isolate the effect of other variables.

Second-order Model

A statistical or mathematical model that includes not only the main effects but also their interactions and quadratic terms, enabling the capture of curvature in the data relationships.