Question

Which of the following would not cause the breakeven point to change? a. Sales volume decreases. b. Sales price increases. c. Product mix shifts towards the cheaper products. d. Variable costs per unit increases. e. Fixed costs decreases.

Answer 1

Answer:

Option (a) is correct.

Explanation:

Break even point = (Fixed expense ÷ contribution margin per unit)

Contribution margin per unit:

= Sales price per unit - variable cost per unit

Hence, this will suggest that there are following factors which affect the Break even point:

(i) Fixed expense

(ii) Sales price per unit

(iii) variable cost per unit

Therefore, from the options given in the question, there is only one factor that is sales volume which doesn't affect the break even point.