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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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