Which of the Following Statements About Break-Even Analysis Is True

question 146

Multiple Choice

Which of the following statements about break-even analysis is true?

• A) It is used to determine how much production experience a company must have in order to achieve desired efficiencies.
• B) It is a technique used to calculate fixed costs.
• C) It determines the amount of retained earnings a company will have during a given accounting period.
• D) It is a technique marketers use to determine the relationship between supply and demand.
• E) It is calculated by using variable costs, the unit price, and fixed costs.

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Definitions:

Ending Balance

The final amount in an account at the end of an accounting period after all debits and credits are accounted for.

Overapplied Overhead

This occurs when the overhead costs allocated to products or jobs exceed the actual overhead costs incurred.

Manufacturing Overhead

includes all production costs other than direct materials and direct labor, such as indirect materials, indirect labor, and factory-related expenses.

Cost of Goods Sold

The total cost directly associated with producing goods that have been sold during a specific period.