Which of the following occurs if a company experiences a decrease in its fixed costs?
A) Income would decrease.
B) The break-even point would decrease.
C) The contribution margin would increase.
D) The contribution margin would decrease.
E) More than one of the other answers would occur.

Question

Quizplus · Accepted Answer

When a company experiences a decrease in its fixed costs, the break-even point would decrease. This means that the company would need to sell fewer units to cover its costs and begin generating profits. This would lead to a more efficient operation and increased profitability.

Which of the Following Occurs If a Company Experiences a Decrease