Chad Has Calculated the Sales Volume at Which His Lemonade

question 138

Multiple Choice

Chad has calculated the sales volume at which his lemonade stand's costs equal revenue.Over dinner,he announced to his family that he only needed to sell 50 glasses of lemonade at $5 per glass to cover all his costs (lumber and nails for the stand,lemons,sugar,etc. ) .Which important factor has Chad excluded from his analysis?

• A)Fixed and variable cost determination
• B)Consumer demand
• C)Target return pricing
• D)Break-even analysis
• E)Market share

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Definitions:

Production Budget

A financial plan that estimates the number of units that need to be manufactured to meet sales goals and inventory requirements.

Cash Budget

An estimate of cash inflows and outflows for a business or project over a specific period of time, used for managing liquidity and ensuring financial stability.

Cash Receipts

The total amount of money received by a company during a specific period, including all sources of income.

Direct Labor-Hours

The aggregate amount of time spent by staff members directly participating in the creation process.