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    matsaw's Avatar
    matsaw Posts: 1, Reputation: 1
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    #1

    Mar 9, 2009, 01:08 PM
    My text does not explain this well
    When fixed costs decrease, what does this do for sales?
    donf's Avatar
    donf Posts: 5,679, Reputation: 582
    Printers & Electronics Expert
    		  
    #2

    Mar 9, 2009, 02:14 PM

    Decreasing fixed costs do nothing for sales.

    Decreased fixed costs affect your bottom line and profitability.

    You could make the case that if it costs you less to do business, then sales would increase your profitability.

    For example, if your sales net was 1000 and your costs were 500 then your profit was 500.

    However, if sales stay the same and the cost goes down to 400 then your profit is 600.
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