Which of the following would take place if a company experienced a decrease in fixed costs?

Question

Quizplus · Accepted Answer

A decrease in fixed costs would result in a decrease in the company's break-even point. This means that the company would need to sell fewer units in order to cover its fixed and variable costs and begin to generate a profit. The other options are incorrect: income would not necessarily decrease (it could increase if sales increase), an increase in contribution margin would require an increase in revenue or decrease in variable costs, and a decrease in contribution margin would occur if the company were to decrease its selling price or increase its variable costs.

Which of the Following Would Take Place If a Company