The breakeven analysis in selecting a suitable site for a plant helps in Maximizing revenue Minimizing total cost Optimizing production volume All of these
Question
The breakeven analysis in selecting a suitable site for a plant helps in Maximizing revenue Minimizing total cost Optimizing production volume All of these
Solution
The breakeven analysis in selecting a suitable site for a plant helps in all of these.
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Maximizing revenue: By selecting a site that minimizes costs (such as labor, materials, and transportation), a company can maximize its revenue. The breakeven point is where total revenue equals total costs, so any revenue beyond this point is profit.
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Minimizing total cost: The breakeven analysis helps identify the point at which the company will start making a profit. By selecting a site that minimizes costs, the company can reach this point sooner.
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Optimizing production volume: The breakeven analysis can also help determine the optimal production volume. This is the level of production where the company can make the most profit, taking into account both fixed and variable costs.
So, the breakeven analysis is a useful tool in the decision-making process for selecting a plant site, as it helps in maximizing revenue, minimizing total cost, and optimizing production volume.
Similar Questions
The intersection point of the total cost and revenue lines represent in breakeven analysis shows Maximum profit Breakeven point Fixed cost Variable cost
The breakeven point is the point at which:a.Costs exceed revenuesb.Revenues exceed costsc.Profits reach their maximum leveld.No profit or loss is incurred
The break-even point in a cost-volume-profit graph is always found:Multiple Choiceat 50% of full capacity.at the sales volume resulting in the lowest average unit cost.at the volume at which total revenue equals total variable costs.at the volume at which total revenue equals total fixed costs plus total variable costs.
BMW is trying to decide where to locate a new factory. It is considering three locations in three different states. The goal is to locate in the lowest-cost site, where cost is measured by the annual fixed costs (state taxes) plus the variable costs of production. BMW has gathered the following data regarding its top three options: Site Annual Fixed CostVariable Cost per VehicleA $14,750,000 $26,850B $16,500,000 $25,850C $19,250,000 $25,350What is the break-even volume (units of production) between Site A and Site B? (Display your answer as a whole number.) What is the break-even volume (units of production) between Site B and Site C? (Display your answer as a whole number.)
Which of the following is true of breakeven analysis?Group of answer choicesA company has broken even when its total sales or revenues equals a third of its expenses.A company has broken even when its total sales or revenues equal half its total expenses.A breakeven analysis is a marketing tool used to predict demand.A breakeven analysis determines the sales volume a company needs to make a profit. PreviousNext
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