Chapter 6, Problem 9Q

To determine

Introduction:

Break-even analysis helps in determining the level of sales that would be required to earn zero-profit or to avoid loss. It calculates the number of units that will be required to calculate the fixed cost.

To state:

That impact that it will have on the break-even analysis if two company’s A and B have the same selling price per unit and same variable cost per unit, but company B has higher fixed cost.