Question

Cost-volume-profit analysis can be considered a more complex form of breakeven analysis. Which of the following is an example of this?

Question 18 options:

	Sara realizes she needs to sell 50 cakes a month to cover all of her variable and fixed costs
	Sara looks at raising the prices of her cakes to see how much more revenue will be generated
	Sara decides to remove carrot cakes from her menu because they do not sell as well the others
	Sara adds more spices to one of her cakes because it will taste better and increase sales

Answer 1

from the all above options it seems like the option (A) is the correct answer, because in cost profit volume analysis there is an analysis involve for the cost i.e. variable cost and fixed cost,and volume i.e 50 unit and profit

in only present option (A) involve cost volume and profit and in all other option there is no cvp analysis involve.

so, Ans A. Sara realizes she needs to sell 50 cakes a month to cover all of her variable and fixed costs, is correct

additionally: the break even point is the amount of revenue that recover all cost elements i.e. variable as well as fixed cost.

in other words, it is the point where company neither makes any profit or loss.