A company that desires to lower its break-even point should strive to:

Question

Quizplus · Accepted Answer

To lower the break-even point, a company needs to reduce the total cost required to produce and sell its products or services. Variable costs are directly tied to production and sales, so reducing them would be the most effective choice to lower the break-even point. Decreasing selling prices may increase sales volume, but it would also decrease the contribution margin per unit, making it harder to cover fixed costs. Increasing fixed costs may lead to more efficient production, but it does not necessarily reduce the break-even point. Selling more units could also be a viable option if the additional sales come with higher per-unit contribution margins, but it may not be a feasible strategy in all business situations.

A Company That Desires to Lower Its Break-Even Point Should