Hampton Company, a producer of computer disks, has the following information:

-If fixed expenses were doubled and contribution margin per unit was cut in half, then the break-even point would
A) be cut in half.
B) double.
C) triple.
D) quadruple.

Question

Hampton Company, a producer of computer disks, has the following information:
 
-If fixed expenses were doubled and contribution margin per unit was cut in half, then the break-even point would
A) be cut in half. 
B) double. 
C) triple. 
D) quadruple.

Quizplus · Accepted Answer

The break-even point is calculated as fixed expenses divided by the contribution margin per unit. If fixed expenses double and the contribution margin per unit is halved, the break-even point would quadruple.

Hampton Company, a Producer of Computer Disks, Has the Following