Laura2880
Nov 23, 2008, 04:19 PM
when fixed costs decrease, what does this do for sales?
Laura2880 Nov 23, 2008, 04:19 PM when fixed costs decrease, what does this do for sales? ASKnRECIEVE Nov 23, 2008, 06:33 PM Fixed costs are expenses that dont change, such as rent expense, phone expense (if same month-to-month), etc. These expenses do not have a direction relationship to sales. With variable costs, such as advertising expenses, you can possibly identify a relationship. Increasing advertising expense, increases sales. So to answer your questions, when fixed costs decrease, this does nothing for sales. It does however increase net profit. Copyright ©2005-, Ask Me Help Desk
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