f a company reduce its selling price, how will the break-even-point be affected?

1. John Diaz is the President of Pacific Refrigeration. The company has 2,000 employees. It manufactures and sells a variety of refrigeration units for commercial use. Recently, the company experienced large losses due to a downturn in the economy and has a subsequent decline in sales. John thinks the losses

were particularly large because of the companys cost structure.

1. Expand on Johns thought. How are large losses related to the cost structure?
2. Identify up to three possible ways to mitigate this problem in the future.