Company X and Company Y Each Have a Break-Even Point

Multiple Choice

Company X and Company Y each have a break-even point of 2,000 units. If Company X has higher fixed costs but lower variable costs, what will be the effect of an increase in sales volume, for both companies, to 2,200 units?

A) The two companies will be equally profitable
B) Company X will become less profitable than Company Y
C) Company X will become more profitable than Company Y
D) The effect cannot be determined without additional information