Breakeven analysis is used
A) When variance analysis can't be performed
B) As an alternative to direct tracing
C) To decide among alternatives with different fixed and variable costs
D) To decide among alternatives with financial and nonfinancial costs
E) To decide between short-term and long-term cost reduction

Question

Quizplus · Accepted Answer

Breakeven analysis is primarily used to determine the point at which revenue received equals the costs associated with receiving the revenue, which is particularly useful in scenarios where a decision has to be made among alternatives with different fixed and variable costs. It helps in understanding how changes in the cost structure and sales volume affect profitability.

Breakeven Analysis Is Used