Which of the following statements about break-even analysis is true?
A) It is used to determine how much production experience a company must have to achieve desired efficiencies.
B) It is a technique used to calculate fixed costs.
C) It determines the amount of retained earnings a company will have during an accounting period.
D) It is a technique marketers use to examine the relationship between supply and demand.
E) It is calculated using variable costs, the unit price, and fixed costs.

Question

Which of the following statements about break-even analysis is true?
A)	It is used to determine how much production experience a company must have to achieve desired efficiencies.
B)	It is a technique used to calculate fixed costs.
C)	It determines the amount of retained earnings a company will have during an accounting period.
D)	It is a technique marketers use to examine the relationship between supply and demand.
E)	It is calculated using variable costs, the unit price, and fixed costs.

Quizplus · Accepted Answer

Break-even analysis is a financial calculation that helps to determine the point at which sales will cover all costs (both fixed and variable), showing no profit but also no loss. It involves the use of variable costs per unit, the selling price per unit, and total fixed costs to find out how many units of a product must be sold to cover all costs.

Which of the Following Statements About Break-Even Analysis Is True