Managers use CVP analysis to predict effects of changes in sales or costs on the break-even point. Using shortcut formulas (2) and (3), answer the following questions. Remember that the contribution margin per unit equals the sales price per unit minus the variable costs per unit.

1. What would be the effect on the unit and money sales break-even level if fixed costs increase (and there are no other changes)?

2. What would be the effect on the unit and money sales break-even level if variable cost per unit decreases (and there are no other changes)?

3. What would be the effect on the unit and money sales break-even level if sales volume increases (and there are no other changes)?