If the price/unit were doubled at the same time that the variable cost/unit doubled, the break-even point would be
A)unaffected.
B)doubled.
C)halved.
D)increased by a factor of four.

Question

Quizplus · Accepted Answer

The break-even point is calculated as fixed costs divided by the contribution margin per unit (price per unit minus variable cost per unit). If both the price and variable cost per unit double, the contribution margin remains the same, so the break-even point is unaffected in terms of units, but since the price per unit is doubled, the revenue needed to break even is halved.

If the Price/unit Were Doubled at the Same Time That