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:

Probability

The measure or assessment of the likelihood of a particular event or outcome happening based on available evidence or statistical analysis.

Coin Flip

A basic form of randomness used as a method for making a decision, characterized by an equal probability of landing on heads or tails.

Probability

An estimate of the probability that a specific event will take place.

Tails

The term used to refer to the rear or back end of an animal's body, or in coin flipping, the side of the coin not displaying the head.