An Analyst at Loude Office,a Company That Makes Wooden Desks,has

question 93

Multiple Choice

An analyst at Loude Office,a company that makes wooden desks,has calculated the sales volume at which the company's costs equal revenue.This analyst announced at the company's quarterly sales meeting that 13,000 desks at an average cost of $150 must be sold to retail stores during the next quarter to reach this point.Which important factor has been excluded from his analysis?

• A)fixed and variable cost determination
• B)consumer demand
• C)break-even analysis
• D)market share

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Definitions:

Net Income

Net income is the total profit of a company after all expenses and taxes have been deducted from revenues, indicating the company's financial performance over a specific period.

Variable Costs

Costs that change in proportion to the level of activity or production volume, such as materials and labor.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales activities.

Contribution Margin

The difference between a company's sales revenue and its variable costs, used to cover fixed costs and generate profit.