In CVP analysis, focusing on target net income rather than operating income ________.
A) will increase the breakeven point
B) will decrease the breakeven point
C) will not change the breakeven point
D) will help managers construct a better capital policy

Question

Quizplus · Accepted Answer

Focusing on target net income rather than operating income does not change the breakeven point because the breakeven point is determined by fixed costs and the contribution margin, which are unaffected by the target net income level.

In CVP Analysis, Focusing on Target Net Income Rather Than