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Fixed Costs Worksheet - Break Even Analysis [Virtual Learning Arcade]

A brief interactive worksheet looking at the impact on the break-even level of output if fixed costs change.

Break Even Analysis: A Change in Fixed Costs

The aim of this question is to interpret the consequences of a fall in the fixed costs on the break-even point.

If the fixed costs fell and output remained constant, the margin of safety would (select one answer)

(a) unmarked question increase
(b) unmarked question decrease
(c) unmarked question unknown
(b) unmarked question remain the same

The company has been approached by the ship maintenance company that have quoted a higher price for maintenance. Ship maintenance increases by £12000.

Comment on the impact on the firm; its profits, break-even mileage and the new margin of safety.; Try This

(Type your answer to the previous question in the box below, then click on explain)


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Submitted by bized on Wed, 14/03/2001 - 13:00