Which of the following is a limitation of break-even analysis?
A)It does not give an estimate of how much profit can be earned once the break-even point is obtained.
B)It does not give weightage to the cost of labor that is incurred during production.
C)It is applicable only when the demand for a product is elastic.
D)It is hard to determine which costs are fixed and which costs are variable.

Question

Which of the following is a limitation of break-even analysis?
A)​It does not give an estimate of how much profit can be earned once the break-even point is obtained.
B)It does not give weightage to the cost of labor that is incurred during production.
C)It is applicable only when the demand for a product is elastic.
D)​It is hard to determine which costs are fixed and which costs are variable.

Quizplus · Accepted Answer

It is hard to determine which costs are fixed and which costs are variable.

Which of the Following Is a Limitation of Break-Even Analysis