Managers focus on the analysis of target net income instead of target operating income because it changes the breakeven point (BEP).

Question

Quizplus · Accepted Answer

Focusing the analysis on target income instead of target operating income will NOT change the breakeven point,because,by definition,operating income at the breakeven point is $0,and no income taxes are paid when there is no operating income.

Managers Focus on the Analysis of Target Net Income Instead