Which of the following occurs if a company experiences a decrease in its fixed costs? Select one: O a. Income would decrease. O b. The break-even point would decrease. O c. The break-even point would increase. O d. More than one of the answers would occur. O e. The contribution margin would decrease.

Which of the following occurs if a company experiences a decrease in its fixed costs? Select one: O a. Income would decrease. O b. The break-even point would decrease. O c. The break-even point would increase. O d. More than one of the answers would occur. O e. The contribution margin would decrease.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 13MC: When fixed costs decrease and all other variables remain unchanged, the break-even point will...

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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
When should a segment be dropped? A. only when the decrease in total contribution margin is less than the decrease in fixed cost B. only when the decrease in total contribution margin is equal to fixed cost C. only when the increase in total contribution margin is more than the decrease in fixed cost D. only when the decrease in total contribution margin is less than the decrease in variable cost
When fixed costs increase and all other variables remain unchanged, the contribution margin will A. remain unchanged _____________________. B. increase C. decrease D. increase variable costs per unit
Would each of the following increase, decrease, or have an indeterminant effect on a firms 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. Variable labor costs decline; other things are held constant.
Which of the following occurs if a company experiences a decrease in its fixed costs? Select one: a. More than one of the answers would occur. b. The break-even point would increase. c. The break-even point would decrease. d. The contribution margin would decrease. e. Income would decrease.
Which of the following occurs if a company experiences an increase in its fixed costs? Select one: O a. Net income would decrease. O b. The contribution margin would increase. Oc The contribution margin would decrease. Od. The break-even point would decra2se, Oe. More than one.of the answers, would.occur.
If a company increases its fixed costs for Product B, then the contribution margin per unit will a. increase. b. decrease. c. remain the same. d. More information needed.
Before a company reaches the breakeven point Select one: a. The fixed cost is equal to zero b. The contribution margin ratio is negative c. Total fixed costs are increasing d. The total contribution margin is negative e. The contribution margin per unit is less than the fixed costs per unit
If fixed costs decrease, which of the following statements is most likely correct? The relevant range has changed. The contribution margin per unit will increase. The volume of sales will increase. The break-even point will increase. Variable costs will increase.
When the total contribution margin is greater than total fixed costs, a company has Select one: a. Higher variable cost and fixed cost. b. A net loss c. Zero profit. d. Net income.
If a company increases its fixed cost for product B, then the contribution margin per unit will Increase Decrease Remain the same More information is needed
Holding other factors constant, a company's contribution margin per unit will increase with: a. All answers given are NOT correct. O b. any increase in quantity sold. С. any increase in variable cost per unit O d. any decrease in the selling price per unit e. increase in its total fixed costs