Which One of the Following Statements About Break-Even Analysis for Evaluating

question 67

Multiple Choice

Which one of the following statements about break-even analysis for evaluating products or services is TRUE?

• A)The break-even quantity will tend to increase as the variable cost per unit of production decreases.
• B)As sales increase beyond the break-even quantity,total before-tax profits tend to decrease.
• C)A restaurant's opening of downsized facilities with only drive-through service is an example of lowering fixed costs and the break-even quantity.
• D)Increasing the unit selling price has the effect of increasing the break-even quantity.

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Definitions:

Risk-Taking Behaviour

The propensity to engage in activities that have the potential for either significant reward or adverse outcome.

Performance Difficulty

Challenges or obstacles that hinder the achievement of desired levels of work output or efficiency.

Desperation

A state of feeling or showing hopelessness and urgency, often leading to hasty decisions or actions.

Environmental Uncertainty

The extent to which an organization lacks predictable and actionable information regarding its external environment, affecting decision-making and strategy.