COST ACCOUNTING
BREAK EVEN POINT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A benefit of break even analysis is that-
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The firm can ask ‘what if ‘ questions by seeing the effects of cost and price changes on break even point
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The firm will know for certain how much to make or sell
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The firm will get better suppliers with a break even chart
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It is fun to do
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Explanation:
Detailed explanation-1: -Break-even analysis is an extremely useful tool for a business and has some significant advantages: it shows how many products they need to sell to ensure a profit. it shows whether a product is worth selling or is too risky. it shows the amount of revenue the business will make at each level of output.
Detailed explanation-2: -Break-even analysis tells you how many units of a product must be sold to cover the fixed and variable costs of production. The break-even point is considered a measure of the margin of safety.
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