question archive Sara is a manager in a retail clothing shop

Sara is a manager in a retail clothing shop

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Sara is a manager in a retail clothing shop. She is considering adding a line of business attire, including suit jackets. Which of the following statements characterizes how Sara could use the break-even point? (Check all that apply.)

1 point

 

The break-even point informs Sara about the best brands and colors to sell.

 

Sara can disclose the break-even point to external users of financial statements.

 

The break-even point informs Sara of the sales necessary to earn a profit.

 

Sara compares her market demand to the break-even point to see whether demand allows for profitability.

Plz help.

Which of the following statements are accurate about cost-volume-profit analysis? (Check all that apply.)

1 point

 

When the sales price increases, the break-even point decreases.

 

When the total fixed costs increase, the break-even point decreases.

 

When the variable cost per unit increases, the break-even point increases.

 

When the variable cost per unit increases, the break-even point decreases.

Lucia is using cost-volume-profit analysis to predict profits for a new product line. Which of the following reflect how Lucia's analysis is subject to assumptions? (Check all that apply.)

1 point

 

If costs are not accurately categorized as fixed or variable, the analysis may reflect too high of a break-even point.

 

The analysis lacks validity if the total fixed costs required for the calculated break-even point generates too high of capacity.

 

Miscategorized variable costs cause more problems than miscategorized fixed costs.

 

If costs are not accurately categorized as fixed or variable, the analysis may reflect too low of a break-even point.

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