Suppose Variable Costs Per Unit Decrease

question 80

Multiple Choice

Suppose variable costs per unit decrease. What will be the effect on sales volume at the break-even point?

• A) Sales volume will increase.
• B) Sales volume will decrease.
• C) Sales volume will remain the same.
• D) Sales volume will remain the same; however, contribution margin per unit will decrease.

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Definitions:

Economic Activity

The actions that involve the production, distribution, and consumption of goods and services in an economy.

Tariffs

Taxes imposed on imported goods and services, which are typically used by governments to protect domestic industries, raise revenue, or exert political leverage.

Trade Restrictions

Regulations or policies that countries adopt to limit the import and export of goods and services, often to protect domestic industries.

Secondary Effects

Unintended consequences of economic actions, which may manifest in areas not directly targeted by the initial action.