On the breakeven graph,if sales price and variable cost remain constant and fixed costs decrease,the total cost line will

Question

Quizplus · Accepted Answer

If fixed costs decrease, the total cost line will shift downwards because fixed costs are a component of total costs. Variable costs, on the other hand, are dependent on sales volume and are not affected by changes in fixed costs, so the variable cost line will remain the same. Therefore, the breakeven point will decrease and the company will need to sell fewer units to cover its costs at the new lower fixed cost level.

On the Breakeven Graph,if Sales Price and Variable Cost Remain