A company's break-even point will not be changed by:
A)a change in total fixed costs.
B)a change in the selling price per unit.
C)a change in the variable cost per unit.
D)a change in the contribution margin ratio.
E)a change in the income tax rate.

Question

Quizplus · Accepted Answer

Changes in income tax rate do not affect the company's break-even point, which is the level of sales at which total revenues equal total expenses. The break-even point is determined by fixed costs, variable costs per unit, and selling price per unit. Changing any of these variables will affect the break-even point, but income tax rate is not one of them.

A Company's Break-Even Point Will Not Be Changed By