Breakeven analysis enables a firm to estimate the effect on net profit of:
A)a change in either fixed or variable cost
B)a reduction or increase in selling price
C)a change in sales volume
D)all of the above

Question

Quizplus · Accepted Answer

Breakeven analysis takes into account all of the above factors in estimating the level of sales needed to cover both variable and fixed costs, and reach a point where the firm is not generating profit or loss. By manipulating any of the above factors, a company can affect its breakeven point and ultimately impact its net profit.

Breakeven Analysis Enables a Firm to Estimate the Effect on Net