Question

Which of the following will lower the breakeven point?

Group of answer choices

a decrease in the sales price per unit

an increase in total fixed costs

an increase in the variable cost per unit

an increase in the sales price per unit

Answer 1

a decrease in the sales price per unit - Will decrease the contribution margin per unit and contribution ratio, which inturn will increase the Breakeven point.

an increase in total fixed costs - To cover this increase, we will need more unit sales, which means breakeven sales will increase.

an increase in the variable cost per unit - Will decrease the contribution margin per unit and contribution ratio, which inturn will increase the Breakeven point.

an increase in the sales price per unit - Will increase the contribution margin per unit and contribution ratio, which inturn will decrease the Breakeven point.

So the answer is an increase in the sales price per unit