Which of the Following Statements Is True If the Variable

question 148

Multiple Choice

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

• A) The breakeven point decreases.
• B) The contribution margin increases.
• C) The breakeven point remains the same.
• D) The breakeven point increases.

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Definitions:

Compensation Cost

The total amount of expense that a company recognizes for paying its employees, including wages, salaries, bonuses, and benefits.

Performance-Based Stock Option Plan

A compensation strategy that grants employees the option to purchase company shares based on the achievement of specific performance criteria.

Compensation Expense

An accounting term that represents the total cost incurred by a company to pay employees, including salaries, benefits, bonuses, and stock options.

Sales Increase

An upward trend in the volume or amount of sales achieved by a business over a given period, indicating growth in revenue.