What are the factors that affect the break-even point under:
(a) variable costing and
(b) absorption costing

(a) Variable Costing: The break-even point under variable costing is affected by the variable cost per unit, total fixed costs, and the selling price per unit. Variable cost per unit represents the cost directly related to production, such as materials and labor. Total fixed costs represent the overhead costs that do not change with production, such as rent and insurance. The selling price per unit is the amount a customer will pay for the product. (b) Absorption Costing: The break-even point under absorption costing is affected by the variable cost per unit, total fixed costs, the selling price per unit, and the amount of overhead allocation (such as administrative and marketing costs) that has been added to the cost of the goods. Fixed costs are the same as under variable costing, but the addition of overhead costs to the cost of goodssold affects the break-even point because it affects the amount of money that must be earned to cover all costs. The selling price of the goods must also be high enough to cover the overhead allocation as well as the variable and fixed costs.