If all other factors are constant, an increase in fixed costs will increase the breakeven point.

Question

Quizplus · Accepted Answer

Fixed costs are those costs that do not vary with the production levels or sales volume. These costs are incurred irrespective of how much product or service is produced or sold. Therefore, an increase in fixed costs will increase the total costs, and as a result, the breakeven point will also increase. This implies that a business will have to produce and sell more units to cover its fixed costs and start generating profits.

If All Other Factors Are Constant, an Increase in Fixed