In absorption costing, the contribution margin per unit, fixed operating and manufacturing costs are all the dependents of ___________?
Correct answer: B. breakeven point
- A. profit point
- B. breakeven point
- C. production point
- D. cost point
Explanation
The break-even point is determined by fixed operating and manufacturing costs divided by contribution margin per unit. Thus, both the contribution margin and fixed costs are key inputs to break-even analysis.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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