If total fixed costs increase while variable costs and sales price are unchanged,what happens to the break-even point?
A) The break-even point increases, and therefore more units must be sold to break even.
B) The break-even point decreases, and therefore fewer units must be sold to break even.
C) The break-even point remains the same.
D) The break-even point decreases and therefore more units must be sold to break even.

Question

Quizplus · Accepted Answer

When total fixed costs increase, it means that the company has to cover more costs before it can break even. This means that the break-even point will increase, and the company will have to sell more units to break even. Therefore, the answer is A.

If Total Fixed Costs Increase While Variable Costs and Sales