The Breakeven Point for a Service Organization Will Decrease If

question 20

Multiple Choice

The breakeven point for a service organization will decrease if:

• A) Volume increases
• B) The variable cost ratio decreases
• C) Fixed costs increase
• D) The contribution margin ratio decreases

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Definitions:

Externalities

Consequences of an economic activity experienced by unrelated third parties; can be positive or negative.

Market Failure

A situation where the allocation of goods and services by a free market is not efficient, often justifying government intervention.

Pollution

The contamination of the natural environment by harmful substances, leading to adverse health effects and environmental damage.

Market Failure

A situation where the allocation of goods and services by a free market is not efficient, often leading to a net societal welfare loss.