Breakeven point in units increases when unit costs?

a. increase and sales price remains unchanged. 

a. increase and sales price remains unchanged.

the reason is that when unit cost increase then and unit sale price remain same then the contribution per unit decrease  and the break even formula    

B.E in units   FC/ Contribution per unit 

eg. sale price =6,  V C is 4 then contibution2=6-4  , then6/2=3

if unit cost cost Increase, 

eg. sale price =6, V C is 4.5 then contibution1.5=6-4.5 , then 6/1.5=4 

A is the correct answer

Option (A)

A  is the correct answer as BEP = FC / UCM

When costs increased and sales price is unchanged the CM "contribution margin" will decrease as CM = SP-VC 

SP = Sales price , VC = Total variable costs 

So the denominator will decrease and numerator FC "fixed costs" will increase which will lead to increase in breakeven point in units.

B