If the total amount of fixed costs increases,what is the effect on the break-even point? (Assume no other changes.)
A)The break-even point increases.
B)The break-even point decreases.
C)The break-even point remains the same.
D)The break-even point will be zero.

Question

Quizplus · Accepted Answer

Fixed costs are costs which do not change with the level of production, such as rent or salaries. If the total amount of fixed costs increases, this means that the business needs to generate more revenue to cover those costs and reach the break-even point. Therefore, the break-even point increases.

If the Total Amount of Fixed Costs Increases,what Is the Effect