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California coast university bam513 unit 4 exam/california coast



1) At the operating breakeven point, ________ equals zero.

a. variable operating costs

b. sales revenue

c. earnings before interest and taxes

d. fixed operating costs

2) Breakeven analysis is used by the firm

a. to determine the level of operations necessary to cover all operating costs.

b. to evaluate the profitability associated with various levels of sales.

c. Both A and B.

d. none of the above

3) If a firm’s variable costs per unit increase, the firm’s operating breakeven point will

a. decrease.

b. remain unchanged.

c. change in an undetermined direction.

d. increase.

4) Noncash charges such as depreciation and amortization ________ the firm’s breakeven point.

a. decrease

b. understate

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