Assume that a profitable firm has been notified that all costs for the coming year will decrease by 2%. The firm will respond by decreasing all selling prices by 2%. The impact of these changes will be to

a. lower the breakeven point in sales dollars

b. increase the breakeven point in sales dollars

c. have no impact on the breakeven point in sales dollars

The company currently has monthly fixed costs of $20,000, variable cost per unit of $10 and a selling price of $15 per unit. The firm is considering decreasing monthly fixed cost by $3,000 and increasing variable cost per unit by $3. The impact of these changes will be to

a. increase the unit breakeven point

b. decrease the unit breakeven point

c. have no impact on the unit breakeven point