Break-even analysis is used to study the effect on EBIT of changes in all of the following EXCEPT
A) corporate taxes.
B) prices.
C) cost structure.
D) volume.

Question

Quizplus · Accepted Answer

Break-even analysis focuses on identifying the volume of sales at which total revenue equals total costs, resulting in zero profit or loss. It studies the effects of changes in prices, cost structure, and volume on the break-even point and EBIT. However, corporate taxes affect net income, not EBIT (earnings before interest and taxes), and are not directly considered in break-even analysis.

Break-Even Analysis Is Used to Study the Effect on EBIT