How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask vinsu Your Own Question
vinsu, Professor
Category: Finance
Satisfied Customers: 522
Experience:  MBA in Finance and Marketing
Type Your Finance Question Here...
vinsu is online now
A new question is answered every 9 seconds

Financial accounting

Customer Question

1.      If the variable cost per unit increases while the sale price per unit and total fixed costs remain constant, the:
a.      break-even point increases
b.      break-even point decreases
c.      break-even point remains the same
d.      contribution margin increases

4. On a cost-volume-profit graph, the break even point is where
e.       the revenue line intersects the profit line
f.        the revenue line intersects the total cost line
g.       the fixed cost line intersects the variable cost line
h.       the contribution margin line intersects the fixed cost line

6.      The Federal Reserve just announced a 2% increase in the fed funds rate. Your company purchased an investment of $2,000,000 of commercial grade bonds yesterday, which you are thinking of selling tomorrow. What has likely happened to the price of those bonds.
a.       the price went up
b.      the price went down
c.       the price did not change
d.      You don’t have enough information
Submitted: 11 years ago.
Category: Finance
Expert:  vinsu replied 11 years ago.

1a. The break-even point increases. This is because the Contribution Margin reduces and more volume is needed to cover the fixed costs.

4f. In the CVP graph, the breakeven point is the intersection of total costs and total revenues.

6.a. The price and interest rates are inversely related. If the interest rates go up, the price would go down