You Are Planning to Open a New Restaurant and Need

question 73

Multiple Choice

You are planning to open a new restaurant and need to determine how many dinners need to be sold to stay above the break-even point. You will investigate Cost Volume Profit (CVP) , also known as break-even analysis.
-In building an Income statement worksheet,you will calculate variable and fixed expenses based on number of meals sold.To explore the impact of changing different values in the worksheet,you can use _______.

• A)Solver manager
• B)Income Statement Analysis
• C)What-If analysis
• D)Cash Flow analysis

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Definitions:

Volume Variance

The difference between the budgeted volume of production or sales and the actual volume, impacting costs or revenue.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, providing a more useful tool for performance evaluation compared to a static budget.

Cost Behavior

The study of how specific costs change in relation to changes in the levels of activity within a company, typically categorized into fixed, variable, and mixed costs.