Asked by Mahmoud Saleh on May 07, 2024
Verified
Break-even analysis assumes that:
A) Total revenue is constant.
B) Unit variable expense is constant.
C) Unit fixed expense is constant.
D) Selling prices must fall in order to generate more revenue.
Break-Even Analysis
A financial calculation to determine the volume of production or sales at which total revenues will equal total costs.
Unit Variable Expense
Costs that vary directly with the production of one unit of a product or service.
- Figure out and appreciate the break-even points in a variety of circumstances.
Verified Answer
CC
Casey CarrollMay 08, 2024
Final Answer :
B
Explanation :
Break-even analysis assumes that unit variable expense is constant, meaning the cost to produce each additional unit does not change as production volume changes. This is a key assumption for calculating the break-even point accurately.
Learning Objectives
- Figure out and appreciate the break-even points in a variety of circumstances.