Which of the following is a drawback of the BEP analysis?
A) It can discourage future profitable activities if they initially don't seem profitable.
B) It can provide wrong indices of profit and loss and confuse managers.
C) It can only be conducted after production has been completed and inventory costs have been made.
D) It detracts from cost reduction and profit maximization.

Question

Quizplus · Accepted Answer

The BEP analysis focuses solely on determining the minimum level of sales necessary to cover costs and does not consider potential profitability or long-term viability of a product or project. This can discourage future profitable activities if they initially don't seem profitable.

Which of the Following Is a Drawback of the BEP