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An organisation produces and sells a single product. The organisation's management accountant has reported the following information for the most recent period.
Which TWO of the following statements are valid? (Choose two.)
Suggested Answer: A, C
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29 comments · newest first
PH
Phillip
11 months ago
Changing variable costs to $16 would lower the breakeven for sure!
RE
Refugia
11 months ago
If selling price goes down, breakeven point definitely goes up.
LA
Lawana
11 months ago
Wait, how can the breakeven point not change with fixed costs? That sounds off.
NI
Nina
12 months ago
Totally agree, D and E seem right!
LU
Lucina
12 months ago
A higher contribution to sales ratio means a lower breakeven point, not higher.
ER
Erick
12 months ago
I feel like I’ve seen a question about how selling price affects the breakeven point, and I think if the price goes down, the breakeven point goes up, so D might be correct.
CE
Celestine
1 year ago
I’m a bit confused about option C. If sales volume changes, wouldn’t that impact how many units we need to sell to break even?
UN
Una
1 year ago
I think I practiced a similar question where fixed costs were involved, and I recall that if fixed costs increase, the breakeven point goes up. So, B seems wrong to me.
LE
Leonora
1 year ago
I remember that if the contribution margin changes, it definitely affects the breakeven point, but I'm not sure if a higher contribution ratio means a higher breakeven point.
DA
Davida
1 year ago
Hmm, this is a tricky one. I'll need to think through each scenario carefully and make sure I'm not making any assumptions. Breakeven point can be a bit finicky, so I'll need to double-check my work.
LE
Leandro
1 year ago
No problem, I've got this. Breakeven analysis is one of my strengths. I can quickly identify the valid statements by applying the formulas and logic. Time to put my knowledge to the test.
RU
Ruthann
1 year ago
I'm a bit confused by the different options here. I'll need to make sure I fully understand the concept of breakeven point and how it's affected by changes in the various cost and revenue factors. Gotta be careful not to overthink this.
RE
Renea
1 year ago
Okay, let's see here. The key is to understand how the breakeven point is calculated and then apply that knowledge to the given scenarios. I think I can work through this step-by-step.
TA
Tawanna
1 year ago
Hmm, this looks like a classic breakeven analysis problem. I'll need to carefully review the information provided and think through how changes to the different variables would impact the breakeven point.
JA
Jamal
2 years ago
Haha, yeah, those pineapple questions are the worst! Anyway, I'm going with B and D. Gotta love it when the math works out nicely.
LU
Luis
2 years ago
Yeah, I also chose B and D. It's satisfying when the numbers line up perfectly.
TR
Truman
2 years ago
I agree, those pineapple questions are tricky. I think B and D are the correct statements.
VE
Veronica
2 years ago
Hmm, I'm not sure about C. Wouldn't the breakeven point change if the sales volume changed? Oh well, at least this isn't like that one exam question about penguins and pineapples.
ER
Erick
2 years ago
B) If the fixed cost changed to $445,000, the breakeven point would not change.
KA
Katie
2 years ago
A) If the contribution to sales ratio changed to 30%, the breakeven point would become higher.
RO
Roxanne
2 years ago
I believe statement E is also valid because lower variable costs would decrease the breakeven point.
CH
Chantell
2 years ago
I agree with Vanna. Fixed costs do not impact the breakeven point.
AL
Allene
2 years ago
I think option E is also correct. If the variable cost decreases, the breakeven point would become lower.
DA
Dahlia
2 years ago
The correct answers are B and D. If the fixed cost changes, the breakeven point won't change. And if the selling price increases, the breakeven point will decrease.
FE
Fernanda
2 years ago
Exactly, that's why the correct answers are B and D.
LA
Launa
2 years ago
So, if the selling price increases, the breakeven point will decrease, right?
YU
Yuki
2 years ago
Yes, if the fixed cost changes, the breakeven point won't change.
EL
Elise
2 years ago
I think the fixed cost is a key factor in determining the breakeven point.
VA
Vanna
2 years ago
I think statement B is valid because fixed costs do not affect the breakeven point.