The Equation Method and the Contribution Margin Method

question 85

Multiple Choice

The equation method and the contribution margin method:

• A)Can determine the breakeven point in units sold but not in sales dollars.
• B)Can determine the breakeven point in sales dollars but not in units sold.
• C)Cannot determine the breakeven point in units sold.
• D)Cannot determine the breakeven point in sales dollars.
• E)Can determine the breakeven point in units sold or sales dollars.

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Definitions:

Labor

The utilization of human physical and mental capabilities in the crafting of goods and delivery of services.

Price Of Labor

The compensation workers receive for their labor, typically in the form of wages or salaries.

Price Of Capital

The cost of using capital funds, often reflected in the interest rate or return required by investors for investing capital or funds.

Isocost

A line on a graph that represents all the combinations of inputs which cost the same amount.