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 in order to achieve desired efficiencies.
B) It is a technique used to calculate fixed costs.
C) It determines the amount of retained earnings a company will have during a given accounting period.
D) It is a technique marketers use to determine the relationship between supply and demand.
E) It is calculated by using variable costs, the unit price, and fixed costs.

Question

Quizplus · Accepted Answer

Break-even analysis is calculated by using variable costs, the unit price, and fixed costs. It is a financial tool used to determine the level of sales a company must achieve to break even (cover all its costs).

Which of the Following Statements About Break-Even Analysis Is True