Which statement regarding break-even analysis is true?
A)Break-even analysis does not measure the cost of sales.
B)Break-even analysis does not measure price sensitivity.
C)Break-even analysis is an accurate measure of fixed costs.
D)Break-even analysis reflects how demand may be affected at different price levels.
E)Break-even analysis is an accurate measure of variable costs.

Question

Quizplus · Accepted Answer

Break-even analysis is primarily focused on determining the point at which revenues equal costs, specifically separating costs into fixed and variable categories. It accurately measures fixed costs as these are essential to calculating the break-even point, where fixed costs are covered by the revenue generated from selling a certain number of units.

Which Statement Regarding Break-Even Analysis Is True