Question: All else being equal, a $10.00 increase in a product's variable expense per unit accompanied by a $10.00 increase in its selling price per unit
All else being equal, a $10.00 increase in a product's variable expense per unit accompanied by a $10.00 increase in its selling price per unit will: Select one: a. increase the break-even volume. b. decrease the total contribution margin. c. None of the given answers. d. have no effect on the degree of operating leverage. e. have no effect on the contribution margin ratio. XYZ Company produces two models of wood chairs, A and B. The selling price per unit and the variable manufacturing, cost per unit for model A are $180 and $105 respectively. The selling price per unit and the variable manufacturing cost per unit for model B are $240 and $114 respectively. The variable selling expense per unit for models A and B are $30 per unit and $36 per unit respectively. Assume that total fixed expenses are $118,800 per month and the expected monthly sales for models A and B are 5,400 units and 1,350 units respectively. If the sales mix and sales units are as expected, the break-even in sales ($) is: (round figures to the nearest number) Select one: a. 196,974 b. None of the given answers c. 292,431 d. 422,400 e. 267,718
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