Which of the Following Statements About the Break-Even Point Is

question 41

Multiple Choice

Which of the following statements about the break-even point is true?

• A) It is used to determine how many more units need to be sold to increase market share by a specific amount.
• B) It is a technique used to calculate fixed costs.
• C) It determines the amount of retained earnings a company will have during an accounting period.
• D) It is a technique marketers use to examine the relationship between supply and demand.
• E) It is calculated using contribution per unit costs and total fixed costs.

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Definitions:

Goodwill

The intangible asset that arises when a company acquires another business for a price higher than the fair value of its net identifiable assets.

Business Combination

A transaction or event in which an acquirer takes control of one or more businesses, such as through merger or acquisition.

Amortized

The process of gradually writing off the initial cost of an asset over a period, in accordance with its estimated useful life.

Equity Method

An accounting technique used to record investments in other companies where the investor has significant influence but not full control.