6
QuizMultiple Choice

Break-Even Analysis

Question 6 • FowU - Financial Math - B

Gabrielle and her business partners are starting a new business that sells organic shampoo. After analyzing the market they have a projected sales forecast showing that they must sell 50,000 bottles of shampoo in 12 months to break-even. Calculating the variable unit cost and projected unit price gives a break-even volume of 45,000 bottles. Why should the projected unit price be changed based on the break-even volume? a. The break-even volume is too close to the forecasted unit sales. b. The break-even volume is much greater than the forecasted unit sales. c. The break-even volume is drastically lower than the forecasted unit sales. d. The break-even volume is not related to the forecasted unit sales. Please select the best answer from the choices provided

Answer
A
A
B
B
C
C
D
D
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Gabrielle and her business partners are starting…