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:

Operating

Pertaining to the day-to-day functions and activities necessary for a business or organization to run effectively.

Internal Users

Individuals within an organization who use its financial information to make decisions, including executives, managers, and other employees.

Management Reports

Analytical reports designed for business managers to assist in making strategic decisions.

Decision Making

The cognitive process resulting in the selection of a course of action among several possible alternatives.