In a break-even analysis, the new equipment or technology is purchased under which condition (assume D is the expected demand for the product in question)? A) D X

Question

In a break-even analysis, the new equipment or technology is purchased under which condition (assume D is the expected demand for the product in question)? A) D < X B) F < X C) D > X D) F > X

Quizplus · Accepted Answer

In break-even analysis, X represents the break-even point where the revenue from the sale of products becomes equal to the cost of producing those products. The break-even point is calculated by dividing the total fixed costs by the difference between the price of the product and the variable cost per unit. Therefore, if the expected demand for the product is greater than the break-even point (D > X), then it is profitable to purchase the new equipment or technology as the increased production can be sold at a profit.

In a Break-Even Analysis, the New Equipment or Technology Is