Break-even analysis is used by the firm
A) to determine the level of operations necessary to cover all operating costs.
B) to evaluate the profitability associated with various levels of sales.
C) for both A and B.
D) for none of the above.

Question

Quizplus · Accepted Answer

Break-even analysis is used by the firm to determine the level of operations necessary to cover all operating costs (option A) as well as to evaluate the profitability associated with various levels of sales (option B), hence both A and B are correct.

Break-Even Analysis Is Used by the Firm