ECONOMICS

Detailed explanation-1: -Lowering variable costs will increase the unit contribution margin and cause the break-even point to be lower.

Detailed explanation-2: -The break-even point will increase by any of the following: An increase in the amount of the company’s fixed costs/expenses. An increase in the per unit variable costs/expenses.

Detailed explanation-3: -Variable Cost per unit decreases: The total cost line will decrease, as total Cost includes fixed Costs and variable Costs. As production increases, fixed cost per unit decreases, leading to a lower total cost relative to total production.

Detailed explanation-4: -Holding other factors constant an increase in variable costs leads to an increase in the break-even point. This is because as the variable costs increase the contribution margin will decrease resulting in a need for more revenues to be able to cover the fixed costs.