In Breakeven Analysis,total Cost Is Composed of

question 59

Multiple Choice

In breakeven analysis,total cost is composed of

• A)total sales minus expenses.
• B)variable costs minus fixed costs.
• C)price divided by number of units sold.
• D)total variable costs and total fixed costs.

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Definitions:

Simple Spending Multiplier

The ratio of a change in real GDP demanded to the initial change in spending that brought it about; the numerical value of the simple spending multiplier is 1/(1 + MPC); called “simple” because only consumption varies with income.

Marginal Propensity

Describes the portion of additional income that an individual is willing to spend on consumption rather than saving.

Off-Balance Sheet Financing

Off-balance sheet financing is the use of funding or financial activities not recorded on the company's balance sheet to keep debt ratios low.

Capitalizing A Lease

The process of recognizing a leased asset and related lease liability on the balance sheet, treating the lease as a purchase financed by a loan.