The process of evaluating a firm's operations to determine the minimum volume it must sell to avoid losing money is referred to as:
A)operating leverage analysis.
B)direct analysis of operations.
C)breakeven analysis.
D)cost, volume, and profit analysis.

Question

Quizplus · Accepted Answer

Breakeven analysis is the process of evaluating a firm's operations to determine the minimum volume it must sell to avoid losing money. It helps businesses to understand at what sales level they will start generating profit and also aids in decision-making regarding pricing, production, and sales strategies. Operating leverage analysis, direct analysis of operations, and cost, volume, and profit analysis are related but different concepts that do not specifically focus on determining the breakeven point.

The Process of Evaluating a Firm's Operations to Determine the Minimum