Would each of the following increase, decrease, or have an indeterminant effect on a firm’sbreak-even point (unit sales)?a. The sales price increases with no change in unit costs.b. An increase in fixed costs is accompanied by a decrease in variable costs.c. A new firm decides to use MACRS depreciation for both book and tax purposes ratherthan the straight-line depreciation method.d. Variable labor costs decline; other things are held constant.

Question

Would each of the following increase, decrease, or have an indeterminant effect on a firm’s
break-even point (unit sales)?
a. The sales price increases with no change in unit costs.
b. An increase in fixed costs is accompanied by a decrease in variable costs.
c. A new firm decides to use MACRS depreciation for both book and tax purposes rather
than the straight-line depreciation method.
d. Variable labor costs decline; other things are held constant.

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