What is the primary intent of performing a breakeven analysis?
A) To maximize productivity
B) To provide a rough idea of the level below which prices cannot fall
C) To facilitate the allocation of fixed costs
D) To determine price elasticity

Question

Quizplus · Accepted Answer

Breakeven analysis is primarily used to understand the point at which total costs and total revenues are equal, meaning there is no net loss or gain. This helps businesses determine the minimum sales volume needed to cover their costs, essentially providing a rough idea of the lowest price point feasible without incurring losses.

What Is the Primary Intent of Performing a Breakeven Analysis