The breakeven point for a retailer will increase if:
A) fixed costs increase.
B) the proportion of less profitable services increases.
C) the contribution margin ratio increases.
D) a and b

Question

Quizplus · Accepted Answer

The breakeven point will increase if fixed costs increase because the business needs to generate more revenue to cover the higher costs before it can start making a profit. Similarly, if the proportion of less profitable services increases, the average profit per sale decreases, requiring more sales to reach the breakeven point. An increase in the contribution margin ratio actually helps in reaching the breakeven point faster, not increasing it.

The Breakeven Point for a Retailer Will Increase If