The Formula for Break-Even Analysis Includes Which of the Following

question 5

Multiple Choice

The formula for break-even analysis includes which of the following components?

• A) depreciation
• B) forecasted sales
• C) forecasted cash requirements
• D) variable cost per unit of output

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Definitions:

Standard Cost

A pre-determined estimate of the cost to produce or acquire a single unit of product or service, used for budgeting and measuring performance.

Direct Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard quantity expected, multiplied by the standard cost per unit.

Standard Quantity

The predetermined amount of materials or inputs planned to be used in a manufacturing process or task.

Standard Price

A predetermined cost that companies assign to goods and services, used as a benchmark to measure the actual cost performance.