Suppose the sales price per unit increases. What will be the effect on the break-even point in units?
A) The units will increase.
B) The units will decrease.
C) The units will remain the same.
D) The units will remain the same; however, contribution per unit will decrease.

Question

Quizplus · Accepted Answer

As the sales price per unit increases, the contribution margin per unit also increases. Therefore, the break-even point in units will decrease because fewer units need to be sold to cover fixed costs.

Suppose the Sales Price Per Unit Increases