All else being equal,which of the following will lower the breakeven point of a firm?
A) higher fixed costs
B) lower selling price
C) lower variable costs
D) none of the above

Question

Quizplus · Accepted Answer

Lowering variable costs will decrease the total cost of producing goods or services, which in turn will decrease the breakeven point. This means the company will need to sell fewer products or services to cover its total costs and begin to earn a profit. Conversely, increasing fixed costs (choice A) or decreasing selling price (choice B) will increase the breakeven point, as the firm will need to sell more products or services to reach the same level of profitability. Option D (none of the above) is incorrect, as one of the choices (C) does lower the breakeven point.

All Else Being Equal,which of the Following Will Lower the Breakeven