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 is zero.

Question

Quizplus · Accepted Answer

The break-even point is the point at which total costs (fixed and variable) equal total revenue. If fixed costs increase, the total cost line will shift upward, which means the break-even point also increases. Therefore, the correct choice is A.

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