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Question

webapps assessment/take launch.jsp?course_assessment_id--512166-1&course;_id:-186359-18 ? ?C Help https--ecf.filmb.circ11 (3) https--ecf.flmb.circ11 (2) https--ecf.flmb.circ11 Middle District of Florid.. Question 7 Which of the following statements about break-even analysis is most likely true? O It is used to determine the maximum price that can be set on a product O It is a tool marketers use to examine the relationship between supply and demand. O It is a tool used to calculate fixed costs lt determines how customer-perceived value changes with value-added pricing O It fails to consider customer val ue and the relationship between price and demand

Explanation / Answer

Breakeven analysis deals with Costs factors and not customer value perceptions .

Therefore , following statements are FALSE :

For

Breakeven analysis establishes the required Volume of sales at which total revenue becomes total cost. The formula for deriving breakeven volume can be determined as :

P.N = F + V.N

P = Price/ unit

N = Breakeven volume

F = Fixed cost

V =Variable cost

It is thus clear that breakeven analysis also does not deal with relationship between demand and supply.

Breakeven analysis as mentioned above however is linked to fixed cost as per above formula. The correct answer therefore is “ It is a tool used to calculate fixed cost “

ANSWER : IT IS A TOOL USED TO CALCULATE THE FIXED COST

ANSWER : IT IS A TOOL USED TO CALCULATE THE FIXED COST

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