A Break-Even Chart Is a Graphic Presentation

question 144

Multiple Choice

A break-even chart is a graphic presentation

• A)that shows the maximum number of units that will be sold at a certain price.
• B)of a break-even analysis that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold.
• C)that relates variable costs in terms of product or service substitutes in order to determine which items or services would least affect total revenues.
• D)that relates profits and revenues versus total costs in order to determine the time frame in which a company could achieve profitability.
• E)is a form of scatter graph used to identify specific activities or items that are creating the greatest return on investment.

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Definitions:

Raw Materials Cost

The total expense incurred for materials that are used in the manufacturing process to produce goods.

Direct Labor Wage Rate

The amount of money paid to workers for each hour of labor.

Raw Materials Inventory

Stocks of unprocessed materials that are used in the manufacturing process to create finished goods.

Raw Material Needs

The quantity of raw materials required to meet production schedules and maintain inventory levels.