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• fall
• rise
• stay the same
• none of the above
Rise is the correct answer.
Break even point will rise as increased costs will require increased productivity.
If fixed cost rises then the break even point will also rise, if the Variable price per unit and Sales price per unit remain constant
The Break even sales will increase
IF FIXED COST RISES, breakeven point will also rise.
Breakeven point = Fixed Cost / Contribution per unit.
Hence increase in fixed cost with Contribution per unit remaining the same, will bring a rise in Breakeven point.
All other things being constant, an increase in the fixed costs will result an increase in the break even point. Thus, choice B, rise is the correct answer.
Rise....
Thank you..>>>>>>>>>>>>>>>
will rise-------------------------------------------
An increase in the Fixed Cost will result a proportionate increase in the BEP where as a decrease in contribution margin of the product also increase the BEP.
The increase of fixed cost will result in an inrease in break even point, it is a direct relationship, accordingly the answer is (rise).
