Homework Answers
Unit variable cost increases.
Explanation:
Let selling price = 100
Variable cost = 50
Fixed cost = 10000
Break even point = 10000/(100-50) = 200 units
Now assume, variable cost increase by 10
Variable cost = 50+10 = 60
New break even = 10000/(100-60) = 250 units
Option b. is correct answer.
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