Question

With regard to break –even charts and break-even analysis, which of the following is true ?
(A) It is assumed that variable cost fluctuates in direct proportion to output
(B) The break the break-even point is at the intersection of the sales line and the variable cost line
(C) A break-even chart shown the maximum profit possible
(D) A break-even chart is capable of dealing with any change of product mix

Answer 1

Answer:

A

Explanation:

Because at breakeven variable costs flactuates as they change in proporattion with the change in products

Answer 2

Answer:

Option (A) It is assumed that variable cost fluctuates in direct proportion to output is the true alternative amongst the other options.

Step by step answer:

• In its simplest form, a break-even chart is a diagram of the costs of different levels of activity displayed in the same chart as the variance of income (or sales, revenue) in the same variance of activity.
• Break-even is a situation where an organization is not making money or losing money, but all costs are covered. Break-even analysis helps to study the relationship between variable costs, fixed costs, and revenue. Typically, a company with low fixed costs will have a lower leave - even a place to sell.