Which of the Following Statements Is True If the Variable

question 110

Multiple Choice

Which of the following statements is true if the variable cost per unit increases while the sales 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:

AASB 121

Refers to the Australian Accounting Standards Board's standard on The Effects of Changes in Foreign Exchange Rates, providing guidance on how to report foreign currency transactions and report the effects of changes in exchange rates.

Monetary Item

Financial assets and liabilities that carry a fixed or determinable amount of money, such as cash, receivables, and payables.

Foreign Exchange Rates

The prices at which one currency can be exchanged for another, influencing international trade and finance.

Functional Currency

The currency of the primary economic environment in which an entity operates, usually the currency of the country where it primarily generates and expends cash.