A Major Assumption of Breakeven Analysis and One Which Causes

question 173

Multiple Choice

A major assumption of breakeven analysis and one which causes severe limitations in its use is that ________.

• A) fixed costs really are fixed
• B) total revenue is nonlinear
• C) revenues and operating costs are linear
• D) all costs are really semi-variable

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Definitions:

Egocentrism

The inability to differentiate between one’s own perspective and someone else's perspective, often seen in early developmental stages.

Preoperational

A stage in Piaget's theory of cognitive development where children aged 2 to 7 years think symbolically but are not yet able to perform operations or reason logically.

Grasping Reflex

An involuntary movement response in infants, where they firmly grasp objects placed in their palms.

Imitation

The action of copying or mimicking the behaviors, actions, or appearance of others as a means of learning or social interaction.