A Weakness of Break-Even Analysis Is That It Assumes

question 53

Multiple Choice

A weakness of break-even analysis is that it assumes

• A) revenue and costs are a linear (constant) function of volume.
• B) sales prices and costs increase when the economy is strong and confidence is high.
• C) the cost of goods sold goes up as revenue increases.
• D) None of the options are true.

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Definitions:

Administrative Staff

Employees responsible for the management and support of an organization, often handling tasks related to office work, clerical duties, and general administration.

Lean Business Model

An approach to business development that emphasizes creating value for customers with minimal waste and resources.

Continuous Improvement

Continuous improvement is an ongoing effort to enhance products, services, or processes through incremental and breakthrough improvements, aiming for efficiency and effectiveness in organizational operations.

Inventory Control

The management and optimization of the purchasing, storing, and selling processes of a business's inventory.