Potential changes in sales prices,fixed operating costs and/or variable costs should be taken into account when using breakeven analysis.

Question

Quizplus · Accepted Answer

Breakeven analysis is a useful tool for calculating the point at which a business will break even (neither make a profit nor suffer a loss). However, it assumes that sales prices, fixed operating costs, and variable costs remain constant. In reality, these factors may change over time, which can affect the accuracy of the breakeven analysis. To account for these potential changes, it is important to regularly review and update the analysis.

Potential Changes in Sales Prices,fixed Operating Costs And/or Variable Costs