Basic Break-Even Analysis Typically Assumes That

question 17

Multiple Choice

Basic break-even analysis typically assumes that:

• A)revenues increase in direct proportion to the volume of production,while costs increase at a decreasing rate as production volume increases.
• B)variable costs and revenues increase in direct proportion to the volume of production.
• C)both costs and revenues are made up of fixed and variable portions.
• D)costs increase in direct proportion to the volume of production,while revenues increase at a decreasing rate as production volume increases because of the need to give quantity discounts.
• E)All of the above are assumptions in the basic break-even model.

---

Definitions:

Costly Negotiations

Negotiation processes that involve significant expenses, time, or resources, which can affect the willingness of parties to reach an agreement.

High-value

Refers to goods or services that have a substantial value in monetary terms or significant importance to a particular process or situation.

Expected Revenue

The amount of money a business anticipates receiving from its activities or sales within a specific period.

Low-value

Refers to items or services perceived as having a lower worth or importance, often associated with lower prices or quality.