What effect could the following changes, occurring independently, have on (1) The breakeven point, (2) The unit

Question:

What effect could the following changes, occurring independently, have on

(1) The breakeven point,

(2) The unit contribution margin, and

(3) The expected total profit?

a. An increase in fixed costs.

b. A decrease in wage rates applicable to direct, strictly variable labor.

c. An increase in the selling price of the product.

d. An increase in production and sales volume.

e. An increase in building insurance rates.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...