The break-even in units sold will decrease if there is an increase in which of the following?
A) Unit sales volume.
B) Total fixed expenses.
C) Unit variable expenses.
D) Selling price.

Question

Quizplus · Accepted Answer

The break-even point in units sold will decrease if there is an increase in the selling price per unit. This is because the break-even point is calculated as the total fixed expenses divided by the contribution margin per unit (selling price per unit minus variable cost per unit). Increasing the selling price per unit increases the contribution margin, thus requiring fewer units to be sold to cover the fixed expenses.

The Break-Even in Units Sold Will Decrease If There Is