East Company has the following budgeted cost and revenue data:
-A 10% increase in fixed expense would result in:

Question

East Company has the following budgeted cost and revenue data: 
-A 10% increase in fixed expense would result in:

Quizplus · Accepted Answer

Fixed expenses are those expenses that do not change with changes in sales volume. Therefore, an increase of 10% in fixed expenses would increase the break-even point (the level of sales required to cover all fixed and variable expenses and earn zero profit). This is because a higher level of sales will be required to cover the additional fixed expenses.

East Company Has the Following Budgeted Cost and Revenue Data