If a company increases its sales price per unit for Product A the new breakeven point will O A remain the same B. decrease O c. increase OD. More information is needed Morenomonised This Test powie Premium Acances had the o n e the past five years To predict revenues for 2018 Premium places there for these years. The companys revene . year Wha 0 Date Table A $100.000 OB 5700.000 OC 25.000 OD$175.000

Solution 1:

Increasing selling price will result in decrease of break even

point.

Hence option B is correct.

Solution 2:

Increase fixed costs, will contribution margin per unit same as

there no change in selling price and unit variable cost.

Hence option A is correct.

solution 3:

Predicted sales for 2018 = ($500,000 + $600,000 + $800,000 +

$700,000 + $900,000) / 5 = $700,000

Margin of safety for 2018 = Current sales – Breakeven sales =

$700,000 – $525,000 = $175,000

Hence option D is correct.