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Change in Fixed Cost
In graph yx shows the existing profit curve for a company along with a fixed cost OY break=-even point B, margin of safety M; profit SX whereas sales volume is OS. A change in fixed cost does not affect the contribution to sales ratio that is only influenced via variable cost and selling price per unit.
Line y1, x1 displays the new profit curve while fixed costs are reduced to OY1. The following must be noted
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The enhancing qualitative characteristic of understandability means that information should be understood by a those who are experts int eh interpretation of financial informat
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