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What is the relationship between fixed cost and break-even point, in other words what are the...

What is the relationship between fixed cost and break-even point, in other words what are the possible outcomes of break-even if fixed cost is more or less in cost?

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Answer #1

Fixed cost and Break even point are directly proportional

1. Break even point increases with increase in fixed costs

2. Break even point decreases with decrease in fixed costs.

Break even point = Fixed cost / Contribution margin per unit

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