If Fixed Costs Rise While Other Variables Stay Constant

question 42

Multiple Choice

If fixed costs rise while other variables stay constant:

• A) the break-even point decreases.
• B) degree of operating leverage decreases.
• C) total profit increases.
• D) total profit decreases.

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Definitions:

Owned 50-50

refers to an arrangement or agreement where two parties each hold a fifty percent ownership interest in an asset, entity, or property.

Liable

The state of being legally responsible for something, especially in the context of lawsuits or debts.

Storage Shop

A commercial facility used for the storage of goods or personal items.

Damages

Monetary compensation awarded by a court to a person who has suffered loss or harm due to the unlawful act or negligence of another.