A supplier has just informed a company about an increase in the cost per unit, although the number of units sold, the unit selling price, and the fixed costs remain unchanged. What will be the effect of these changes?

Question

Quizplus · Accepted Answer

The increase in the cost per unit will lead to a decrease in profit before tax because the cost of goods sold will increase while revenue remains unchanged.

A Supplier Has Just Informed a Company About an Increase