Question

Determine the effect for each of the following cases using the following choices, assuming each is...

Determine the effect for each of the following cases using the following choices, assuming each is independent:

a. Breakeven point is raised.

b. Breakeven point is lowered.

c. Breakeven point is not changed.

d. Unable to determine the effect.

1. Because of an improving economy, Alpine is able to sell more units.

2. Because of an improving economy, Alpine is able to raise the selling price by 10% with the expectation that unit sales will stay the same.

3. Alpine has an increase in the wages paid, which increases the variable costs, and Alpine does not change the selling price.

4. Because of increased competition, Alpine reduces the selling price by 5%.  The number of units sold is expected to stay the same,

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Answer #1

Determine the effect for each of the following cases using the following choices, assuming each is independent:

1. Because of an improving economy, Alpine is able to sell more units. c. Breakeven point is not changed.
2. Because of an improving economy, Alpine is able to raise the selling price by 10% with the expectation that unit sales will stay the same. b. Breakeven point is lowered.
3. Alpine has an increase in the wages paid, which increases the variable costs, and Alpine does not change the selling price. a. Breakeven point is raised.
4. Because of increased competition, Alpine reduces the selling price by 5%.  The number of units sold is expected to stay the same, a. Breakeven point is raised.
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