All other things being equal, an increase in the amount of fixed operating costs for a firm would:
A) increase the break-even point
B) decrease the break-even point
C) have no impact on the break-even point
D) not enough information given

Question

Quizplus · Accepted Answer

When fixed operating costs increase, the overall cost structure of the firm shifts toward fixed costs, leading to a higher break-even point. This is because the firm now needs to sell more units to cover the higher fixed costs before it can start generating profits. Therefore, an increase in fixed operating costs would increase the break-even point.

All Other Things Being Equal, an Increase in the Amount