What assumptions are made when using break-even analysis?
What will be an ideal response?
Break-even analysis is useful to evaluate new or existing products or services and to compare production methods; however, decision makers who use this model make assumptions. Typically, single values are provided for fixed and variable cost and for revenues. This results in wonderfully straight lines that do not reflect realities such as start-up costs, economies of scale, price breaks offered to volume purchasers, and diseconomies of scale.
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Gatekeepers have formal or informal power to select or approve the final suppliers
Indicate whether the statement is true or false
Mace and Bowen are partners and share equally in income or loss. Mace's current capital balance is $135,000 and Bowen's is $120,000. Mace and Bowen agree to accept Kent with a 30% interest in the partnership. Kent invests $115,000 in the partnership. The amount credited to Kent's capital account is:
A. $115,000. B. $119,000. C. $111,000. D. $92,500. E. $120,000.
The bottleneck time is always at least as long as the throughput time
Indicate whether the statement is true or false
As product differentiation becomes increasingly difficult to sustain, markets have begun to focus on ________________________.
a. Upgrade product b. Users' experience c. Product quality d. Line extension