Financial Breakeven Analysis Determines the Operating Income at Which the _____

question 50

Multiple Choice

Financial breakeven analysis determines the operating income at which the _____ is equal to zero.

• A) earnings before interest and tax (EBIT)
• B) degree of operating leverage
• C) earnings per share
• D) degree of financial leverage (DFL)
• E) gross profit

---

Definitions:

Customer Needs

The wants and requirements identified by customers, which businesses aim to satisfy through their products or services to ensure customer satisfaction and loyalty.

FIFO Method

"First-In, First-Out," an inventory valuation approach where the first items acquired are the first ones sold, affecting the cost of goods sold and inventory valuation.

Process Costing

An accounting method used to calculate the cost of a process, or series of processes, through which a product moves, assigning average costs to each product unit.

Equivalent Units

A term used in cost accounting to express the amount of production output in terms of fully completed units of output.