Company X Has Variable Costs Per Unit of $20,fixed Costs

question 138

Multiple Choice

Company X has variable costs per unit of $20,fixed costs of $300,000,and a break-even point in units of 60,000 units.If the sales price per unit decreases by $2 and the variable cost per unit decreases by $2,what would happen to the break-even point?

• A) Break-even point increases.
• B) Break-even point in dollars decreases.
• C) Break-even point stays the same.
• D) Break-even point in dollars decreases and break-even point in units stays the same.

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Definitions:

Damages

Monetary compensation ordered by a court for harm or injury suffered by an individual.

Ordinary Care

The level of caution and attention to duty that a reasonable person would employ in similar circumstances, often relevant in negligence cases.

Bailment

The act of temporarily placing control over, or possession of, personal property by one person into the hands of another, under agreement.

Reasonable Care

A legal standard implying that a person or entity should act with the caution and prudence that a reasonable person would use in similar circumstances.