Reference no: EM132969985

Problem 1: Which of following is true about the break-even point? (Check all that apply.)

Option 1: It's the point where variable costs equal fixed costs.
Option 2: Managers usually report the break-even point in currency terms.
Option 3: Managers usually report the break-even point in units.
Option 4: It's the point where contribution margin equals fixed costs.

Problem 2: Jacob is a manager in a bakery. He is considering expanding his dessert line to include gluten-free options. Which of the following is relevant to Jacob's use of break-even point information? (Check all that apply.)

Option 1: Jacob knows that demand will only be 100 units per week.
Option 2: Jacob knows that he currently can only produce 80 units per week.
Option 3: Jacob wants to know projected gross margin.
Option 4: Jacob knows he can only sustain a loss for two months.