I’m working on a accounting writing question and need an explanation and answer to help me learn.
Discuss your answers to the following questions:
- Would an increase in variable costs per unit cause a company’s break-even point to increase or decrease? Why?
- Would an increase in unit selling price cause a company’s break-even point to increase or decrease? Why?
- An examination of the accounting records of Alinma Company disclosed a high contribution margin ratio and production at a level below maximum capacity. Based on this information, discuss a likely means of improving operating income. Explain your answer by sharing the calculations needed.
- Both Alireza Company and Jarir Company had the same unit sales, total costs, and operating income for the current fiscal year; yet, Alireza Company had a lower break-even point than Jarir Company.Discuss the reason for this difference in break-even points and provide and example of this calculation.
