Break-even analysis assumes that:Multiple ChoiceUnit fixed expense is constant. Selling prices must fall in order to generate more revenue. Total revenue is constant. Unit variable expense is constant.

Question

Laci Howell

Business

19 May, 12:51

Break-even analysis assumes that:Multiple ChoiceUnit fixed expense is constant. Selling prices must fall in order to generate more revenue. Total revenue is constant. Unit variable expense is constant.

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Answers (1)

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Caitlyn Wood · Answer 1

Option D. Unit variable expense is constant.

Explanation:

The Correct option is D because if the breakeven analysis doesn't assume that then it makes the calculation meaningless. Furthermore, the changes in the fixed expense are easily figured out at the instance and similar is the case of the price that we charge our customers. But the changes in the unit variable cost per unit can not be determined and changes changes the breakeven if not noticed and not controled. So the assumption is that the unit variable cost per unit remains the same.