A-LevelAccountingTraditional costing methods9706/12 · May/June 2023 · Q281 Mark

A business has the following information about a type of product. current production and sales 8000 units unit selling price $20 unit variable cost $12 total fixed costs $25000 What will happen to the break-even point and the margin of safety if fixed costs increase to $32000?

Adecrease by 875 units decrease by 875 units

Bdecrease by 875 units increase by 875 units

Cincrease by 875 units decrease by 875 units

Dincrease by 875 units increase by 875 units

✓ Correct answer

C: increase by 875 units decrease by 875 units

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Topic: Traditional costing methods, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, May/June 2023 Paper 1 Variant 2, question 28.

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