When fixed costs decrease, what does this do for sales?

Question

When fixed costs decrease, what does this do for sales?

Answer 1

The relationship between fixed costs and sales is that lower fixed costs, with sales remaining constant means higher profits.  Companies with high fixed costs have high operating leverage.  If sales increase then variable costs increase.

Answer 2

It doesn't have any effect on Sales figures. However, if you're talking about profit, this scenario will increase your profit.

Answer 3

By necessity, it would do nothing for sales.  Sales are units moved. These are top line, gross income dollars.

Fixed cost reductions will by their nature increase bottom line income and net profits (sales less costs =  profits).