24. If the total amount of fixed costs increases, what is the effect on the break-even point? (Assume no other changes.)

A) The break-even point decreases.

B) The break-even point increases.

C) The break-even point remains the same.

D) The break-even point is zero.

25. If the variable cost per unit increases, what is the effect on the break-even point? (Assume no other changes.)

A) The break-even point increases.

B) The break-even point decreases.

C) The break-even point remains the same.

D) The break-even point is zero.

26. Assume Ravi Company has the following information available:

Selling price per unit $50

Variable cost per unit $30

Fixed costs per year $200,000

Expected sales per year (units) 20,000

If fixed costs increase by $80,000, what is the break-even point in units?

A) 6,667

B) 10,000

C) 12,000

D) 14,000

27. The use of high technology equipment to manufacture products instead of highly skilled labor usually results in ________.

A) higher operating leverage

B) higher discretionary fixed costs

C) higher discretionary variable costs

D) lower risk

28. Managers can eliminate ________ costs entirely for a given year in dire times such as a major recession. However, managers cannot eliminate ________ costs.

A) discretionary variable costs; committed variable costs

B) discretionary variable costs; committed fixed costs

C) discretionary fixed costs; committed fixed costs

D) committed fixed costs; committed variable costs