Which of the following statements about operating breakeven analysis is correct?
A)Operating breakeven analysis involves determining the level of production and sales at which net operating income is equal to one.
B)Operating breakeven analysis involves determining the point at which sales revenues equal operating costs.
C)Operating breakeven analysis involves determining the level of production and sales at which financing costs are recovered.
D)Operating breakeven analysis involves determining the operating income the firm needs to generate to cover all of its financing costs.
E)Operating breakeven analysis involves the analysis of the interest payments to bondholders and the dividend payments to preferred stockholders.

Question

Quizplus · Accepted Answer

Operating breakeven analysis involves determining the point at which sales revenues equal operating costs. This helps to determine the minimum level of sales that a company must achieve in order to cover its operating costs and break even.

Which of the Following Statements About Operating Breakeven Analysis Is