3-1 niev

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reply to below in 150 words

 

Break-even point is the level of sales where there is no profit or loss to the business, the contribution margin is just equal to the fixed cost incurred. As the president stated, raising the price of their product while the cost remains constant will result in an increase in the contribution margin per unit. With that increase the break-even point in units will decrease. The financial vice president statement is not agreeable simply because there are risks in increasing product prices and one of them is a decrease in sales. Expected volume of product sold may not be achieved, thus resulting in incurring a loss.

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