Which of the following statements is TRUE if the fixed costs increase while the sales price per unit and variable costs per unit remain constant?

Question

Quizplus · Accepted Answer

The contribution margin, defined as sales price per unit minus variable cost per unit, remains unchanged because neither the sales price per unit nor the variable costs per unit are affected by changes in fixed costs. However, the break-even point, which is the level of sales at which total revenues equal total costs, increases because higher fixed costs require higher sales to cover these increased costs.

Which of the Following Statements Is TRUE If the Fixed