PLUS Kimmel, Accounting, 6e d, Study & Practice Assignment Gradebook ORION Downl
ID: 2599547 • Letter: P
Question
PLUS Kimmel, Accounting, 6e d, Study & Practice Assignment Gradebook ORION Downloadable eTextbook Open Assignment MER Start Time: 05:16 PM/Remaining: 54 min T RESOURCES Exam 3 Question 1 The break-even point cannot be determined by reading the prior year's financialstatements. O deriving it from a CVP graph. O computing it using contribution margin. computing it from a mathematical equation. Click if you would like to Show Work for this question: Open Show Work 16 Question A tion 26 tion 28 Agreement 1 Privacy Palicy 2000-2017 2ohn.Wilkey& Sens. Jns. All Rights Reserved. A Divisien of John. Wiley &.Sans. IncExplanation / Answer
ANSWER
The break-even point cannot be determined by- reading the prior year's financial statements.
The break-even point is a point where contribution margin is equal to fixed costs. It is calculated by dividing fixed costs by contribution margin per unit.
Contribution margin and fixed costs varies from year to year, so current years breakeven may vary from prior years, so it cannot be determined using prior years financial statements.
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