Mark Company currently sells a video recorder with a selling price of $300 per unit.The variable expense per unit is $175 and fixed expenses are $100,000.If the company reduces variable expenses by $20 per unit and increases the fixed expenses by $10,000,the break-even point will increase.

Question

Quizplus · Accepted Answer

Increasing fixed expenses will increase the overall break-even point, while decreasing variable expenses will decrease the break-even point. Therefore, the combination of reducing variable expenses and increasing fixed expenses will not necessarily change the break-even point, but the given scenario specifically indicates that the break-even point will increase.

Mark Company Currently Sells a Video Recorder with a Selling