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
Increasing selling price will result in decrease of break even
Hence option B is correct.
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.
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.