The break-even point in unit sales increases when variable expenses:
A)remain unchanged and the selling price increases.
B)decrease and the selling price remains unchanged.
C)increase and the selling price remains unchanged.
D)decrease and the selling price increases.

Question

Quizplus · Accepted Answer

The break-even point is the number of units sold where the total revenue equals the total cost. If variable expenses increase, it will take more unit sales to break even. The selling price remaining unchanged will not affect the break-even point, as it only affects the revenue side of the equation. Decreasing variable expenses or increasing selling price would lower the break-even point. Therefore, the correct choice is C.

The Break-Even Point in Unit Sales Increases When Variable Expenses