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Assuming all other things are equal, if there was a decrease in the break-even point, fixed...

Assuming all other things are equal, if there was a decrease in the break-even point, fixed costs must have:

increase

decrease

stay the same

increased first, then decrease
Business   Accounting   
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Homework Answers

Answer #1

Answer:

Decrease

Explanation to the answer:

If all other things are equal and if there was a decrease in the break-even point, fixed costs must have because fixed cost decreases then breakeven point decreases

Suppose company has $10 sales value and $5 is variable cost the contribution margin is $5 per share here fixed cost is $5000 the Breakeven point is

=5000/5

=1000 units

Now fixed cost decreases from 5000 to 4000 then breakeven point will also decreas ,

New BEP

=4000/5

=800 units

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