Answer (B) is correct . An increase in semivariable costs consists of either higher fixed cost, higher variable cost, or both. An increase in either will raise the BEP. If fixed costs increase, more units must be sold to cover the greater fixed costs. If variable costs increase, the unit contribution margin will decrease and again more units must be sold to cover the fixed costs.
Answer (A) is incorrect because If other factors are constant, an increase in sales price or a decrease in unit variable cost increases the unit contribution margin and lowers the BEP.
Answer (C) is incorrect because An increase in the unit contribution margin lowers the BEP.
Answer (D) is incorrect because If income taxes are taken into account, they are treated as variable costs. A decrease in variable costs lowers the BEP.
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