Breakeven analysis helps in finding the level of activity at which sales revenue equals the sum of all variable and fixed costs.

Question

Quizplus · Accepted Answer

Breakeven analysis is a technique that helps businesses determine the point at which sales revenue will equal the total cost of production. This analysis helps businesses determine the minimum amount of sales volume required to cover all of their fixed and variable costs. Once this point is reached, the company will begin to generate profits. Thus, the statement is true.

Breakeven Analysis Helps in Finding the Level of Activity at Which