Due to the difficulty of allocating costs to products in a multiproduct firm, the breakeven model may fail to determine breakeven points for each product line.

Question

Quizplus · Accepted Answer

The breakeven model assumes a single product or service; therefore, it may not accurately determine breakeven points for each product line in a multiproduct firm where costs cannot be easily allocated to specific products.

Due to the Difficulty of Allocating Costs to Products in a Multiproduct