Which Condition Would Result in Invalidating an Application of Break-Even

question 26

Multiple Choice

Which condition would result in invalidating an application of break-even analysis?

• A) The variable cost to produce a unit is less than one percent of the fixed cost to run the plant.
• B) The purchasing department both offers quantity discounts to customers and receives quantity discounts from suppliers.
• C) The variable cost to produce a unit is within one percent of the sale price.
• D) The labor to manufacture the item is free.

---

Definitions:

Probability

A measure of the likelihood of a particular event or outcome, expressed as a ratio between 0 and 1.

Expected Return

The projected average return on an investment over a given period.

Economic Scenarios

Hypothetical constructs detailing possible future economic conditions, used for planning and risk assessment purposes.

Stock Performance

It refers to the return on investment in a company's stock, taking into account capital appreciation and dividends, over a specified period.