ECONOMICS

Detailed explanation-1: -An increase in fixed cost will increase the break-even units as an increase in the numerator will increase the ratio. The break-even point is calculated as fixed cost divided by contribution per unit, so as the fixed cost increases the units required to cover the fixed cost will also increase.

Detailed explanation-2: -Normally, as the selling price per unit rises, the break-even point in units declines. Therefore, a decline in selling price per unit will cause a rise in the break-even point. Sales decrease would lead to lesser contribution margin which in turn would lead to lesser fixed costs being funded by sales.

Detailed explanation-3: -Total profit at the break-even point is zero.

Detailed explanation-4: -What does a high or low breakeven point mean? A low breakeven point means that the business will start making a profit sooner, whereas a high breakeven point means more products or services need to be sold to reach that point.