A firm is reorganising and reclassifying its cost structure. The firm previously classified the item 'glue and nails' as indirect material. The firm is considering now tracing this cost directly to products and treating 'glue and nails' as direct material. What is the effect on the break-even point (if any) of that change, provided all other items remain unchanged?
A) The break-even point will not change.
B) The break-even point will increase.
C) The break-even point will decrease.
D) The break-even point will change but without actual figures, it is impossible to say in what direction the change will be.
Correct Answer:
Verified
Q41: Would you expect the following to be
Q42: Which of the following do limitations of
Q43: Your local pizza parlour has annual fixed
Q44: Which of the following statements applies to
Q45: For a firm that would break even
Q47: Would you expect the following to be
Q48: If break-even sales volume is $40 000
Q49: 'Goal seek' analysis provides for which of
Q50: The contribution margin ratio is calculated as
A)
Q51: Would you expect the following to be
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents