Asked by Alexandria Kunzler on May 29, 2024
Verified
When calculating the breakeven point with a company that has multiple products, there is no real need to know the proportion of the sales for each product.
Breakeven Point
The level of production or sales at which total revenues equal total expenses, with no profit or loss.
Sales Proportion
The ratio of a particular product's sales to the total sales of all products, often used to analyze the performance or popularity of products.
Multiple Products
The strategy or condition of manufacturing or selling a variety of different products, often to diversify risk or meet various consumer demands.
- Determine the effect of product sales distribution on the financial success of a company.
Verified Answer
RD
Rebecca DorcelyJun 05, 2024
Final Answer :
False
Explanation :
In order to accurately calculate the breakeven point for a company with multiple products, it is necessary to know the proportion of sales for each product, as each product may have different profit margins and contribution margins. Without this information, the breakeven point calculation may be inaccurate.
Learning Objectives
- Determine the effect of product sales distribution on the financial success of a company.