The break-even point is that at which:Select one:O A. The level of activity at which the business operates most economicallyB. The level of activity at which the business neither makes a profit nor a lossO C. The fixed costs are the lowestO D. The variable cost per unit is minimised

Solution:- Break-even point is the point where the total costs of a business are equal to the total…

Answered: The break-even point is that at which:…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Which one of the following statement is not correct? O Both fixed and variable costs influence short-term decision-making. O Short-term decision-making is all about analysing those costs that will change as a result of taking a particular action. O Opportunity costs are only considered when resources are limited. O Break-even analysis is used to determine how many units of a product or a service a business has to sell to cover all its costs.
Which of the following is true when referring to fixed costs? I. Fixed costs remain constant in total throughout the relevant range. II. The trend in companies today is toward greater fixed costs relative to variable costs. III. As volume increases, unit fixed cost and total fixed cost will change. IV. Fixed costs increase in total throughout the relevant range. a. II only b. All but IV c. I and II d. All but III e. None of these
Which of the following costs are always incremental and relevant in decision analysis? a) Opportunity costs and sunk costs b) Avoidable costs and opportunity costs c) Only avoidable costs d) Avoidable costs and sunk costs Which of the following will increase a company's breakeven point? a) reducing its total fixed costs b) increasing the selling price per unit c) increasing variable cost per unit d) increasing contribution margin per unit
If an organization wants to make a profit, it must generate more sales revenue than the total costs it incurs. This relation can be expressed using which of the following profit equations? O a. Operating income = [(Sales price per unit - Variable cost per unit) x #units sold] - Fixed cost O b. Operating income = [Sales price per unit - Fixed cost per unit) x # units produced] -Variable cost Oc Operating income Sales revenue - Total variable costs - Discretionary costs O d. Operating income - Sales revenue - Committed costs - Fixed costs
Which of the following items will not cause the company's ROA to increase? Multiple Choice O O Reducing costs. Reducing company assets without impacting sales. Increasing company assets. Increasing the selling price per unit. $
At break even point: a) sales - contribution margin = net income or net loss b) sales - fixed expenses = variable expenses c) sales + variable expenses = contribution margin d) contribution margin + fixed expenses = net income
Each of a company's two product lines has a different contribution margin ratio . If the company's total sales remain the same but the sales mix shifts toward selling more of the product with the higher contribution ratio , which of the following is true ? O a Fixed cost will be constant . . the breakeven point will decrease . Ocall of the answers are true . d the average contribution margin ratio will increase . O e operating income will increase

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The break-even point is that at which: Select one: O A. The level of activity at which the business operates most economically OB. The level of activity at which the business neither makes a profit nor a loss O C. The fixed costs are the lowest O D. The variable cost per unit is minimised