If the Selling Price Per Unit Were to Drop $2

question 16

Multiple Choice

If the selling price per unit were to drop $2, from $100 to $98, the sales volume were to increase 500 units to 4,500 units per month, and advertising expense were to increase by $1,000:

• A) the break-even point would increase.
• B) the break-even point would decrease.
• C) the contribution margin ratio would increase.
• D)operating income would decrease.

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Definitions:

Electrons

Electrons are subatomic particles with a negative electric charge, found in all atoms and acting as the primary carrier of electricity in solids.

Positive Ions

Atoms or molecules that have lost one or more electrons, resulting in a net positive charge.

Gain Electrons

The process by which an atom or a molecule acquires one or more electrons, often leading to a reduction in oxidation state.

Lose Electrons

Refers to the process in which an atom or molecule undergoes oxidation, resulting in the release of electrons.