Answered: A decrease in fixed costs will increase…

A decrease in fixed costs will increase the number of units that need to be sold in order to breakeven. Group of answer choices True False

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 12MC: When variable costs increase and all other variables remain unchanged, the break-even point will...

See similar textbooks

Related questions

Q: Which of the following statements about margin of safety is false? O a. If only the fixed costs…

A: This option is False A. If only the fixed cost decreases but the number of units sold and unit…

Q: Describe how the break-even point would be affected in each of the following scenarios: Decrease in…

A: Break-even analysis is the easiest form of cost-volume-profit analysis. Break-even analysis is used…

Q: Which of the following statements about margin of safety is false? O a. If the variable cost per…

A: Margin of safety means the difference between the actual sales of the company and the Break even…

Q: A company observed a decrease in the cost per unit All other things being equal, which of the…

A: SOLUTION- 1-You can reduce the unit cost of products by lowering your overhead cost per item. 2- By…

Q: Each of a company's two product lines has a different contribution margin ratio. If the company's…

A: Contribution margin (CM), or dollar contribution per unit, is the selling price per unit minus the…

Q: A company that desires to lower its break-even point should strive to: reduce variable costs.…

A: Breakeven point in cost accounting is that point of revenue at which business is only recovering…

Q: :When performing sales mix analysis, which one of the following is true Shifting the sales mix to…

A: Break-even analysis is a technique widely used by the production department. It helps to determine…

Q: Which of the following statements about margin of safety is false? O a. If the variable cost per…

A: If Fixed cost decreases remaining constant Break even sales automatically Break even sales reduces…

Q: Which of the following statements about margin of safety is false? O a. If only the fixed costs…

A: The Margin of Safety is the difference between the Budgeted Revenues and Breakeven Revenues.…

Q: Which of the following statements is NOT true about costs per unit within the relevant range?…

A: Fixed cost is the cost that remains the same at all levels of output. Whereas, variable cost varies…

Q: true or false, An increase in total fixed costs lowers the break-even point.

A: Formula: Break even point = Fixed costs / Contribution margin per unit. Contribution margin per unit…

Q: The breakeven point increases if: O a. the selling price per unit increases O b. the total fixed…

A: 1) D is the correct answer Because The break-even point can increase once the number of fixed prices…

Q: When variable costs increase and all other variables remain unchanged, the break-even point will:…

A: Variable Cost refers to those Cost which are Variable on nature that means they are changed with the…

Q: Each of a company's two product lines has a different contribution margin ratio. If the company's…

A: The costs when are covered with certain amount of revenue earned, such amount is treated as break…

Q: not lower a company's break-even point?

A: Option A is wrong because an increase in selling price will lower the break-even point. Option B is…

Q: If the fixed expenses of a product increase while variable expenses and the selling price remain…

A: Break even point is the point at which the original cost equals the market price. It is where…

Q: To increase margin of safety, the following measures can be taken O a. Increase the output O b.…

A: The margin of safety is the excess of current sales over break even sales.

Q: If fixed costs related to a product increase, while variable costs and sales ?price remain constant,…

A: Breakeven point is that point of sales revenue at which business is covering its fixed costs and…

Q: When deciding whether we should add or drop a product or segment, we should think about Multiple…

A: When deciding whether we should add or drop a product or segment, we should think about : the…

Q: when the contribution margin ratio increases

A: Option A is wrong because break-even point decreases when the contribution margin ratio increases.…

Q: breakeven point increases

A: Break even point is the minimum units required to be sold before beginning to generate profit. Break…

Q: Select the correct statement regarding break-even point analysis. Multiple Choice O O The break-even…

A: The break-even point is that level of the unit where the company neither incurs any gain nor any…

Q: If XYZ Company sells unit outputs that exceed the breakeven point, a. there will be an increase in…

A: CVP investigation takes a goose at the impact of deals volume minor departure from prices and…

Q: If Mazoon Company sells unit outputs below the breakeven point O a. there will be a loss b. total…

A: break even point is a situation where the company will be in a stage of no profit and no loss. Every…

Q: Briefly explain the impact of each of the following scenarios on the break-even point and the margin…

A: The break even sales units are the sales where business earns no profit no loss during the period.

Q: Special order, opportunity cost. In order to determine whether a special order should be accepted at…

A: Opprtunity cost should be consider while accepting special order. As order is received at full…

Q: When performing sales mix analysis, which one of the following is false: Oa. Producing and selling…

A: Breakeven sales is that point of sales revenue at which business is covering its fixed costs and…

Q: 1. The most likely strategy to reduce the break-even point would be to a. Increase both the fixed…

A: A Break-even point is a point at which a company is able to cover all its expenses with the present…

Q: 1. Briefly explain the impact of each of the following scenarios on the break-even point and the…

A: 1. BREAK EVEN POINT : = FIXED COST / CONTRIBUTION MARGIN PER UNIT 2. MARGIN OF SAFETY : =…

Q: Which of the following would produce no change in the contribution margin per unit? Select one: O a.…

A: Contribution Margin: The process or theory which is used to judge the benefit given by each unit of…

Q: 14. If the fixed expenses of a product increase while variable expenses and the selling price…

A: CVP analysis is used widely in cost and management accounting to know the change in costs of the…

Q: Which of the following occurs if a company experiences a decrease in its fixed costs? Select one: O…

A: Break even point: It is calculated by dividing the fixed cost by the contribution margin ratio.

Q: If the number of units produced decreases, which of the following is true? answer choices…

A: Lets understand the basics. Variable costs are cost which changes with level of output. For ex.…

Q: Which of the following statements about margin of safety is false? If the variable cost per unit…

A: Margin of safety can be referred to as the difference between the break even sales and the expected…

Q: The contribution margin ratio always increases when (you may select more thanone answer):a. Sales…

A: Contribution Margin: The process or theory which is used to judge the benefit given by each unit of…

Q: 3. When the contribution margin per unit increases assuming all other factors remain constant. The…

A: The formula for Contribution margin per unit is : =Sales Revenue per unit - Variable Cost per unit…

Q: On the cost-volume-profit graph, which of the following would result into an increase in the…

A: Break even point in units = Fixed costs / (Selling price per unit - Variable cost per unit

Q: The break-even point in a given situation would be decreased by an increase in a. the CM ratio. b.…

A: CVP analysis is considered a decision-making tool that helps management to make strategies and take…

Q: Holding all other factors constant, the break-even point will be decreased by increasing the fixed…

A: The correct answer is Option C.

Q: Which of the following occurs if a company experiences an increase in its fixed costs? Select one: O…

A: Formula: Break even point = Fixed cost / Contribution margin. Contribution margin means deduction of…

Q: When performing sales mix analysis, which one of the following is true: a. Producing and selling…

A: Sales mix is the ratio in which different products are sold in the company. Contribution margin is…

Q: Each of a company's two product lines has a different contribution margin ratio. If the company's…

A: "Since you have asked multiple question we will solve the first question for you. If you want any…

Q: •The most likely strategy to reduce the break-even point should be to 1. Increase fixed costs 2.…

A: Note: Since you have posted multiple questions, we will solve the first question for you. To get the…

Q: The breakeven point decreases if: a. the variable cost per unit increases b. the contribution margin…

A: The break even is a scenario whereby the revenues are equal to the costs. This simply means that the…

Q: When variable costs increase and all other variables remain unchanged, the break-even point will: a.…

A: Break even point is that point at which business is recovering its fixed costs and variable costs.…

Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

Question

A decrease in fixed costs will increase the number of units that need to be sold in order to breakeven.

Group of answer choices

True

False

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

When variable costs increase and all other variables remain unchanged, the break-even point will ____________________. A. remain unchanged B. increase C. decrease D. produce a lower contribution margin
With all other data held constant, an increase in variable costs should do which of the following? Group of answer choices increase breakeven units. have no impact on breakeven units. decrease breakeven units. increase contribution margin per unit.
A company that desires to lower its break-even point should strive to: reduce variable costs. pursue more than one of the above actions. sell more units. decrease selling prices. increase fixed costs.
You decide to increase advertising, you will not change the selling price and variable cost per unit do not change. In this scenario, your breakeven point in units will Group of answer choices: Increase decrease stay the same the answer cannot be determined from the given information
CVP analysis using activity-based costs will tend to shift some costs from fixed to variable classifications, resulting in: Multiple Choice A higher contribution margin per unit. Lower breakeven sales. Higher breakeven sales. Higher or lower breakeven sales, depending on batch size. A lower contribution margin per unit.
Which of the following costs are always incremental and relevant in decision analysis? a) Opportunity costs and sunk costs b) Avoidable costs and opportunity costs c) Only avoidable costs d) Avoidable costs and sunk costs Which of the following will increase a company's breakeven point? a) reducing its total fixed costs b) increasing the selling price per unit c) increasing variable cost per unit d) increasing contribution margin per unit
When deciding whether we should add or drop a product or segment, we should think about Multiple Choice the product's or segment's traceable costs the impact of dropping the existing product or segment on the remaining products' or segments' sales all of the above are true whether the freed up capacity (from dropping a product or segment) will bring us additional revenue
When constrained by a limiting resource, managers often seek to produce those products which have: Question options: a)The highest selling prices. b)The lowest average cost per unit. c)The highest contribution margin ratios. d)The highest contribution margin per unit of limiting resource.
Assume there is a reduction in the selling price and all other CVP parameters remain constant. This change will: increase contribution margin reduce operating income O reduce fixed costs increase variable costs
When variable costs increase and all other variables remain unchanged, the break-even point will ________. Select one: a. produce a lower contribution margin b. remain unchanged c. decrease d. increase
If only the selling price per unit of a product increases (variable cost per unit and total fixed costs do not change), does the breakeven point increase or decrease? Using Break Even Analysis, provide a unique mathematical example to support you
“Companies should always make and sell all products whose selling prices exceed variable costs.” Assuming xed costs areirrelevant, do you agree? Explain.