If fixed costs attendant to a product increased while variable costs and sales price remain constant, what will happen to contribution margin (CN) and breakeven point (BEP)?

Explanation:

Contribution margin would not change because fixed costs do not affect the contribution margin formula. Formula is:

= Sales - Variable cost

As for breakeven point, it will have to increase because more costs are being incurred means more cost to overcome and get to a breaking point.

Formula for breakeven point is :

= Fixed cost / Contribution margin

Notice that in the formula, if Fixed costs increase, the breakeven point will be longer because the numerator became higher than it was.

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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