What is the purpose of using break-even analysis when attempting to set prices?
A) To determine the total costs of the product
B) To show the cost, volume, and profit relationships
C) To compare demand and supply
D) To reflect the markup needed to make a profit
E) To show the costs which must be considered in setting prices

Question

Quizplus · Accepted Answer

Break-even analysis helps in showing the cost, volume, and profit relationships which are crucial information for setting prices. It helps to determine the quantity of products that must be sold to cover the costs and achieve a profit. By using break-even analysis, businesses can ensure that they are pricing their products effectively to achieve their desired profit margins.

What Is the Purpose of Using Break-Even Analysis When Attempting