ECONOMICS

Detailed explanation-1: -If the selling price per unit increases, the variable cost per unit remains the same. In effect, the total contribution margin per unit increases.

Detailed explanation-2: -If the sales price per unit increases while the variable cost per unit and total fixed costs remain constant, which of the following statements is true? The contribution margin increases and the breakeven point decreases.

Detailed explanation-3: -When production or sales increase, variable costs increase; when production or sales decrease, variable costs decrease. Variable costs stand in contrast to fixed costs, which do not change in proportion to production or sales volume.

Detailed explanation-4: -The variable cost varies with the level of production, this means that as the level of production increases the level of variable cost increases too. The rate of increase in variable cost is the same as the rate of increase in the variable cost, therefore, the variable cost will remain constant.

Detailed explanation-5: -In short, we can say that when costs increase, the Break-even point increases, and when the selling price increases, the break-even point decreases.