Question

Question 33 2.5 pts

Break-even analysis is the process of determining ________ before we begin earning a profit.

Group of answer choices

how many units must be produced, or how much revenue must be obtained

how much net profit will be made, or how many units will be produced

how much revenue must be obtained, or how much net profit will be made

what price we will charged for a product, or how many units must be produced

what price will be charged for a product, or how much net profit will be made

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Question 34 2.5 pts

The contribution margin in break-even analysis is derived by subtracting

Group of answer choices

fixed costs from price.

fixed costs from variable costs.

price from variable costs.

variable cost per unit from fixed costs.

variable cost per unit from price.

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Question 35 2.5 pts

The earning power of a company can be defined as the product of two factors:

Group of answer choices

fixed asset turnover and cash flow per share.

net profit margin and fixed asset turnover.

net profit margin and total asset turnover.

total asset turnover and earnings per share.

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Question 36 2.5 pts

In a conservative approach, a company will have

Group of answer choices

high fixed costs.

a narrow contribution margin.

low variable costs.

None of these.

Answer 1

Q.33-Break even analysis is the process if determining HOW MANY UNIT MUST BE PRODUCE OR HOW MUCH REVENUE MUST BE OBTAIN before we begin earning a profit.

Break even analysis is a business tool widely used across all industries to evaluate business performance in term of costs,since this is a supply- side analysis.It helps the business determine the cost structures and the number of units that need to be sold in order to cover the cost or make a profit.

Q.34-The contribution margin in break even analysis is derived by subtracting VARIABLE COST PER UNIT FROM PRICE.

Q.35-Earning power of company can be defined as the product of two factors: TOTAL ASSET TURNOVER AND EARNING PER SHARE.

Q.36-In a conservative approach,a company will have NONE OF THESE.

Conservative approach is a risk free strategy of working capital financing.A company adopting this strategy maintains a higher level of current assets and therefore higher working capital also.