If Both Fixed Expenses and the Selling Price Per Unit

question 211

Multiple Choice

If both fixed expenses and the selling price per unit increase while variable costs per unit are unchanged, which of the following statements is true?

• A)Breakeven point in units increases.
• B)Breakeven point in units could increase, decrease, or remain the same.
• C)Breakeven point in units decreases.
• D)Breakeven point in units remains unchanged.

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Definitions:

Aging of Accounts Receivable

A method of categorizing accounts receivable based on how long they have been outstanding.

Percentage of Sales Basis

A forecasting method where certain expenses or accounts are based on a predetermined percentage of sales.

Bad Debt Expense

The cost associated with accounts receivable that a company does not expect to collect.

Aging Schedule

A table summarizing the amounts owed to a business, grouped by the length of time the bills have been outstanding, used to monitor and manage receivables.