Asked by Andrew Elmowitz on Apr 30, 2024
Verified
If yearly insurance premiums are increased, this change in fixed costs will result in an increase in the break-even point.
Insurance Premiums
The amount of money an individual or business pays for an insurance policy.
Break-even Point
The financial analysis point at which total costs and total revenues are equal, yielding no net loss or gain.
- Investigate the influence of fixed and variable costs on the financial performance of an enterprise.
- Calculate break-even points and understand their significance in business decision-making.
- Recognize how changes in cost components can affect company profitability.
Verified Answer
BO
Briana OchoaMay 02, 2024
Final Answer :
True
Explanation :
If fixed costs increase, the break-even point (the level of sales needed to cover all costs) will also increase because the business will need to sell more to cover the higher costs.
Learning Objectives
- Investigate the influence of fixed and variable costs on the financial performance of an enterprise.
- Calculate break-even points and understand their significance in business decision-making.
- Recognize how changes in cost components can affect company profitability.