Which of the following would not affect the break-even point?<\/p>\n\n\n\n
A) number of units sold
B) variable expense per unit
C) total fixed expenses
D) selling price per unit<\/p>\n\n\n\n
The Correct Answer and Explanation is:<\/mark><\/strong><\/p>\n\n\n\n Correct Answer: A) Number of units sold<\/strong><\/p>\n\n\n\n The break-even point<\/strong> is the point at which total revenues equal total expenses<\/strong> \u2014 meaning no profit or loss is made. It\u2019s a critical financial analysis tool that helps businesses determine the minimum sales volume needed to avoid losing money.<\/p>\n\n\n\n The break-even point in units<\/strong> is calculated using the following formula:<\/p>\n\n\n\n $$ This formula tells us the number of units that must be sold to cover all costs.<\/p>\n\n\n\n Now, let’s break down each option:<\/p>\n\n\n\n The number of units sold does not affect the break-even point<\/strong> \u2014 rather, it’s the result<\/strong> of the break-even analysis. The break-even point determines how many units must be sold<\/strong> to reach zero profit. If a business sells more than the break-even units, it makes a profit. If it sells fewer, it incurs a loss. Therefore, the number of units sold is a performance measure<\/strong>, not a factor that influences<\/strong> the break-even point itself.<\/p>\n\n\n\n If the variable cost per unit increases<\/strong>, the contribution margin (selling price \u2013 variable cost) decreases, which means the company must sell more units<\/strong> to break even. A higher variable cost per unit raises<\/strong> the break-even point.<\/p>\n\n\n\n If fixed costs rise, the business needs to generate more contribution margin to cover those fixed costs, thus increasing<\/strong> the break-even point. Lower fixed costs would have the opposite effect.<\/p>\n\n\n\n An increase in selling price increases the contribution margin<\/strong>, which means fewer units<\/strong> need to be sold to cover fixed costs. Conversely, a lower selling price increases the break-even point.<\/p>\n\n\n\n Only option A<\/strong> (number of units sold) does not<\/strong> affect the break-even point \u2014 it is what<\/strong> the break-even point calculates, not what influences it<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":" Which of the following would not affect the break-even point? A) number of units soldB) variable expense per unitC) total fixed expensesD) selling price per unit The Correct Answer and Explanation is: Correct Answer: A) Number of units sold Explanation: The break-even point is the point at which total revenues equal total expenses \u2014 meaning […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-215634","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/215634","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=215634"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/215634\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=215634"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=215634"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=215634"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Explanation:<\/strong><\/h3>\n\n\n\n
\\text{Break-even point (units)} = \\frac{\\text{Total Fixed Costs}}{\\text{Selling Price per Unit} – \\text{Variable Cost per Unit}}
$$<\/p>\n\n\n\n
\n\n\n\nA) Number of units sold \u2013 CORRECT ANSWER<\/strong><\/h3>\n\n\n\n
\n\n\n\nB) Variable expense per unit \u2013 Affects break-even point<\/strong><\/h3>\n\n\n\n
\n\n\n\nC) Total fixed expenses \u2013 Affects break-even point<\/strong><\/h3>\n\n\n\n
\n\n\n\nD) Selling price per unit \u2013 Affects break-even point<\/strong><\/h3>\n\n\n\n
\n\n\n\nConclusion:<\/strong><\/h3>\n\n\n\n