Discussion
Which of the following would NOT lower a firm's break-even point?
Answer: C
Correct answer: raising the variable cost per unit
A higher variable cost narrows the contribution and so raises the break-even point, which is the opposite of what was asked for. The other three all lower it: cutting fixed costs reduces what has to be covered, raising the price widens the contribution, and shifting the mix towards the higher-margin product raises the weighted average contribution.
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