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    Question

    When a company compares its sales and expenses to determine that volume of production where there is no profit and no loss. This type of analysis is known as:

    A Financial planning and analysis Correct Answer Incorrect Answer
    B Budget Analysis Correct Answer Incorrect Answer
    C Break even analysis Correct Answer Incorrect Answer
    D Variance analysis Correct Answer Incorrect Answer
    E Du-Pont analysis Correct Answer Incorrect Answer

    Solution

    Breakeven analysis is used to determine when your business will be able to cover all its expenses and begin to make a profit. The breakeven point is reached when revenue equals all business costs. To calculate your breakeven point, you will need to identify your fixed and variable costs. Break Even point = Fixed cost / (Sale price-variable cost)

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