Which of the following accurately describes break-even analysis?
A)the process of calculating the percentage change in quantity demanded in response to a percentage change in price
B)the process of calculating the point at which fixed costs and variable costs are equal
C)the process of calculating the sales volume needed to achieve a profit of zero
D)the process of calculating the difference between marginal revenue and marginal cost
E)the process of calculating how many units of product must be sold to cover fixed costs

Question

Quizplus · Accepted Answer

Break-even analysis is the process of determining the level of sales at which total costs equal total revenue or the sales volume needed to achieve a profit of zero. This is achieved by analyzing fixed costs, variable costs, and unit selling price. Option A refers to elasticity of demand, Option B refers to the balance of fixed and variable costs, Option D refers to marginal analysis, and Option E refers to calculating the number of units needed to cover fixed costs.

Which of the Following Accurately Describes Break-Even Analysis