State the effect of each of the following actions on the break-even point. Answer |The unit selling price is increased from $18 to $20. ĮUnit variable expenses are decreased from $12 to $10. Fixed expenses are increased by $3,000 per period Two thousand more units are sold during the period than were budgeted Due to paying salespersons a commission rather than a flat salary, fixed expenses are reduced by $8,000 per period and unit variable expenses are increased by $3 Due to an increase in the cost of materials, both unit variable expenses and the selling price are increased by $2. |Advertising costs are increased by $10,000 per period, resulting in a 10% increase in the number of units sold. Due to automating an operation previously done by workers, fixed expenses are increased by $12,000 per period and unit variable expenses are reduced by $4.

State the effect of each of the following actions on the break-even point. Answer |The unit selling price is increased from $18 to $20. ĮUnit variable expenses are decreased from $12 to $10. Fixed expenses are increased by $3,000 per period Two thousand more units are sold during the period than were budgeted Due to paying salespersons a commission rather than a flat salary, fixed expenses are reduced by $8,000 per period and unit variable expenses are increased by $3 Due to an increase in the cost of materials, both unit variable expenses and the selling price are increased by $2. |Advertising costs are increased by $10,000 per period, resulting in a 10% increase in the number of units sold. Due to automating an operation previously done by workers, fixed expenses are increased by $12,000 per period and unit variable expenses are reduced by $4.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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