In: Accounting
What effect could the following changes, occurring independently, have on (1) the break-even point, (2) the unit contribution margin, and (3) the expected net profit?
a) an increase in fixed costs
b) a decrease in wage rates applicable to direct, strictly variable labor
c) an increase in the selling price of the product
d) an increase in production and sales volume
e) an increase in building insurance rates
Pick two of the five changes and comment on them, providing numbers to justify or prove your assessment.