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

question 194

Multiple Choice

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

• A)It assumes that the demand curve is perfectly horizontal at the selling price.
• B)It reveals the price that will earn the highest profit.
• C)It cannot be used for comparing several different alternatives (for example,assuming different prices).
• D)It considers the effect of price on the quantity that consumers will want.
• E)It helps to compute the break-even point in units alone.

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Definitions:

Efforts

The use of physical or mental energy to achieve tasks and goals.

Accomplishments

Achievements or completed goals that an individual or organization has successfully attained.

Revenue Recognition Principle

An accounting guideline stating that revenue should be reported when it is earned and realizable, regardless of when the cash is received.

Accounting Period

A specific duration of time, such as a month, quarter, or year, over which financial activities are recorded and reported.