Assume a Product Costs $5 Each

question 175

Multiple Choice

Assume a product costs $5 each. The variable cost per unit is currently $4, and fixed costs are $25,000. If the company can alter its production method such that variable costs fall to $3.50 and fixed costs rise to $30,000, what will happen to the breakeven point?

• A) It will fall.
• B) It will rise.
• C) It will remain the same.
• D) It will rise and fall later.

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