Which of the Following Is a Limitation of Break-Even Analysis

question 13

Multiple Choice

Which of the following is a limitation of break-even analysis?

• A)​It does not give an estimate of how much profit can be earned once the break-even point is obtained.
• B)It does not give weightage to the cost of labor that is incurred during production.
• C)It is applicable only when the demand for a product is elastic.
• D)​It is hard to determine which costs are fixed and which costs are variable.

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Definitions:

Planning

The process of making detailed strategies or arrangements beforehand to achieve specific goals or outcomes.

Completing

The act of finishing a task or bringing something to an end.

Business Communication

The sharing of information between people within and outside the organization that is performed for the commercial benefit of the organization.

General Category

A broad classification or grouping that encompasses a wide range of items, concepts, or phenomena sharing common characteristics.