Using the sliders in the Interactive Illustration given below, enter a hypothetical revenue per unit (r), variable cost per unit (v), and total fixed costs (C). The graph will display the output required to fully cover the firm's fixed costs in that scenario- breakeven volume. Analyze the changes and answer the following:

1. How does a change in total fixed costs (C) affect the breakeven point?

2. What happens when the variable cost per unit (v) approaches revenue per unit (r)? Why?

Breakeven Analysis BUSINESS PUBLISHING Units Sold Relative to Breakeven Financial Outcomes Revenue per Unit Sold (r) $100 $0 $500 20,000 $400,000 Variable Cost per Unit Sold (V) $10 $200,000 15,000 $500 $5,000 $3,500 Fixed Costs (C) $1,000 -$1,500 Units of Output 10,000 $100,000 $(200,000) Actual Units Sold 5,000 $(400,000) 5,000 $(600,000) BEV = 1,000 (100 - 10) -= 12 units (r-v) 01250 Breakeven Actual Units Sold Revenue Cost Profit