If fixed costs are increased, then a breakeven analysis with an adjustment for profit will yield an increase in the number of sales or targeted sales units.

Question

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During breakeven analysis, fixed costs are a key factor in determining the minimum number of sales units required to cover all costs and reach the breakeven point. If fixed costs are increased, the breakeven point will also increase, which means that a higher number of sales units will be required to cover all costs and achieve a profitable operation. Therefore, adjusting for profit in the breakeven analysis will result in an increase in the number of sales or targeted sales units to achieve the desired level of profitability.

If Fixed Costs Are Increased, Then a Breakeven Analysis with an Adjustment