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3 years ago

Select the correct statement regarding break-even point analysis.

Business

1 answer:

svetoff [14.1K]3 years ago

3 0

Answer:

Option B is true.

Explanation:

Giving the following information:

The break-even point in units formula is:

Break-even point= fixed costs/ contribution margin

What changes the break-even point:

A variation in fixed costs.

A variation on the selling price.

A variation in the unitary variable cost.

The higher the fixed costs, the higher the number of units. Lower the contribution margin, the higher the number of units.

Therefore:

a. An increase in contribution margin per unit causes the break-even point in units to increase. False, is the opposite.

b. An increase in fixed costs causes the break-even point to increase. True, now the organization needs to sell more units to cover the fixed costs.

c. The break-even point in sales dollars equals total fixed costs divided by contribution margin per unit. False, in dollars you need to divide it for the contribution margin ratio (contribution margin / selling price).

d. A decrease in the variable cost per unit causes the break-even point in units to increase. False, is the opposite.

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2 years ago

Suppose the United States is currently producing 200 tons of hamburgers and 60 tons of tacos and Mexico is currently producing 4

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Answer:

Explanation:

United States is producing 200 tons of hamburgers and 60 tons of tacos.

United States' opportunity cost for producing 1 ton of hamburgers

= $\frac{60}{200}$

= 0.3

United States' opportunity cost for producing 60 tons of tacos.

= $\frac{200}{60}$

= 3.33

So we see that US has a lower opportunity cost in producing hamburgers, so it has a comparative advantage in producing hamburgers.

Mexico is producing 40 tons of hamburgers and 50 tons of tacos.

Mexico's opportunity cost of producing a ton of hamburgers

= $\frac{50}{40}$

= 1.25

Mexico's opportunity cost of producing a ton of tacos

= $\frac{40}{50}$

= 0.8

So we see that Mexico has a lower opportunity cost in producing tacos, so it has a comparative advantage in making tacos.

Since US specializes in making hamburgers, it will produce 200 tons of hamburgers and 0 tons of tacos.

Mexico specializes in making tacos, it will produce 50 tons of tacos and 0 tons of hamburgers.

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3 years ago

Assuming a binding price floor, the more inelastic the supply and the demand curves are, the:1'smaller the shortage a price floo

KATRIN_1 [288]

Answer:

Option "3" is the correct answer.

Explanation:

Inelastic demand curve depict when there's no evident increase in demand due to an increase in price.

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3 years ago

Read 2 more answers

A corporation is considering expanding operations to meet growing demand. With the capital expansion, the current accounts are e

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Answer:

B) a decrease of $40,000

Explanation:

As we Know Working capital is the the net or current assets and current liabilities.

Increase in Current Assets

Cash $20,000

Accounts receivable $40,000

Inventories $60,000

Total Increase in CA $120,000

Increase in Current Liabilities

Accounts payable $50,000

Accruals $10,000

Long-term debt $100,000

Total Increase in CA $160,000

Increase in Working Capital = Increase in Current Assets - Increase in Current Liabilities

Change in Working Capital = $120,000 - $160,000 = -$40,000

As current Liabilities increased more than the current assets, so the working capital will decrease by $40,000

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2 years ago