If direct materials cost per unit increases, the break-even point will increase.

Name: If direct materials cost per unit increases, the break-even point will increase.
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Question

Quizplus · Accepted Answer

If direct materials cost per unit increases, the cost per unit of production will increase. This means that the contribution margin per unit will decrease, and more units will need to be sold to cover fixed costs and break even. Therefore, the break-even point will increase.

If Direct Materials Cost Per Unit Increases, the Break-Even Point