What happens to break even point if fixed cost increase and variable cost decrease?

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1049071

2026-03-02 12:55

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If fixed cost is increased it means more number of units are required to cover fixed cost that's mean breakeven point will increase as well.

If variable cost reduces then it means there is increase in contribution margin and contribution margin ratio which means that less number of units will be required to cover fixed cost hence breakeven point will reduce.

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