Which of the following statements about break- even analysis is true?
A)It is used to determine how much production experience a company must have to achieve desired efficiencies.
B)It is a technique used to calculate fixed costs.
C)It is a technique marketers use to examine the relationship between supply and demand.
D)It determines the amount of retained earnings a company will have during an accounting period.
E)It is calculated using variable costs,the unit price,and fixed costs.

Question

Quizplus · Accepted Answer

Break-even analysis is a financial tool used to determine the point at which a business will break even by calculating the minimum amount of sales required to cover all costs (both variable and fixed). It is calculated using the unit price, variable costs, and fixed costs. Therefore, option E is the correct statement. Option A is incorrect because break-even analysis is not used to determine production experience. Option B is incorrect because it calculates both fixed and variable costs. Option C is incorrect because it is not related to supply and demand. Option D is incorrect because it does not calculate retained earnings.

Which of the Following Statements About Break- Even Analysis Is