Holding all other factors constant, the breakeven point will always double if fixed expenses increase by 25%.

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Quizplus · Accepted Answer

The breakeven point does not necessarily double when fixed expenses increase by 25%. The breakeven point is determined by the formula: Fixed Costs / (Selling Price per Unit - Variable Cost per Unit). A 25% increase in fixed costs increases the numerator, but the breakeven point's change depends on the proportion of fixed costs to the contribution margin (Selling Price per Unit - Variable Cost per Unit). Doubling the breakeven point would require a specific and much larger increase in fixed costs or changes in other variables.

Holding All Other Factors Constant, the Breakeven Point Will Always