Using cost-volume-profit analysis,what would be the result of a 20 percent reduction in variable costs?

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Quizplus · Accepted Answer

A reduction in variable costs decreases the amount by which total costs increase for each additional unit produced or sold, effectively reducing the slope of the total cost line. This is because the total cost line is determined by both fixed costs (which do not change with the level of production or sales) and variable costs (which do change). A decrease in variable costs means that for each unit sold, less cost is added, hence the slope of the total cost line decreases. Choices A, B, and D do not accurately describe the direct impact of a reduction in variable costs on cost-volume-profit analysis.

Using Cost-Volume-Profit Analysis,what Would Be the Result of a 20