Cost Volume Profit Analysis - Break Even Analysis

What is the primary goal of a break-even analysis?

• To increase market share

• To minimize expenses

• To determine the sales level needed to cover costs

• To maximize profit

In the break-even analysis, what does setting the operating income to zero signify?

• Maximizing sales revenue

• Minimizing fixed costs

• Reaching a point where sales equal total expenses

• Achieving maximum profit

How do you calculate the break-even point in units?

• Total revenue divided by fixed cost

• Variable cost divided by unit contribution margin

• Fixed cost divided by unit contribution margin

• Fixed cost divided by unit selling price

What is the unit contribution margin in the given example?

• $20

• $50

• $30

• $40

How is the contribution margin ratio calculated?

• Fixed cost divided by total sales

• Unit contribution margin divided by unit selling price

• Total expenses divided by total sales

• Operating income divided by fixed cost