Answer
(a) For variable costing, the breakeven point is influenced by fixed costs and the contribution margin per unit.
(b) Under absorption costing, the breakeven point is affected by fixed costs, contribution margin per unit, the production level beyond the breakeven point, and the choice of the denominator level for setting fixed manufacturing cost rates.
Work Step by Step
(a) For variable costing, the breakeven point is influenced by fixed costs and the contribution margin per unit.
(b) Under absorption costing, the breakeven point is affected by fixed costs, contribution margin per unit, the production level beyond the breakeven point, and the choice of the denominator level for setting fixed manufacturing cost rates.