If all other factors are constant, any increase in fixed costs will increase the break-even point.

Question

Quizplus · Accepted Answer

Fixed costs are costs that do not vary with changes in production levels or sales volume. These costs are incurred regardless of whether the company produces or sells any units. Since fixed costs are not affected by changes in production or sales, an increase in fixed costs will increase the total costs and, consequently, the break-even point. This is because the break-even point is the level of sales at which total revenue equals total costs, and an increase in fixed costs will raise the total costs, which means that the break-even point must also increase to reach the same level of total revenue.

If All Other Factors Are Constant, Any Increase in Fixed