The Following Information Is Taken from the Accounts of Spratt

question 24

Multiple Choice

The following information is taken from the accounts of Spratt Ltd.
- What was the value of plant purchased?

• A) $20 000
• B) $70 000
• C) $88 000
• D) $120 000

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Definitions:

Break-Even Analysis

A means of finding the point, in dollars and units, at which costs equal revenues.

Variable Costs

Costs that vary directly with the level of production or business activity, such as materials and labor.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance.

Break-Even Point

The point at which total costs and total revenue are equal, meaning no net loss or gain, and one has "broken even."