A breakeven analysis is used to:
A) determine the amount of sales volume a company needs to start making a profit.
B) utilize personal, family, or friends' money to start a business.
C) represent a legal obligation to repay original debt plus interest.
D) raise money by selling a certain share of the ownership of the business.
E) purchase supplies or equipment through financing made available by vendors.

Question

Quizplus · Accepted Answer

A breakeven analysis is used to determine the amount of sales volume a company needs to start making a profit. It helps businesses to understand at what point their revenue equals their costs, allowing them to identify the minimum amount of output that must be produced and sold to avoid losing money. This information is essential for creating a pricing strategy, budgeting, and planning for future growth.

A Breakeven Analysis Is Used To