Question detail
Northline Gym serves small retailers while taking a loan; the case evidence includes capacity utilisation of ?9,794, sales of 494 units, and a 23% change in costs or demand. Which option best applies Explain break-even output?
Try the question, check the answer, then read the explanation to understand the curriculum point.
At a glance
MCQ
Type
practice
Style
Topic
Financial terms and calculations
Question
- A. Use break-even output to judge unit contribution, owners impact, and the business objective in Break-even.
- B. Give only a definition of Financial terms and calculations without using the case evidence.
- C. Treat fixed and variable costs as identical and ignore the effect on owners.
- D. Choose the largest sales figure without checking costs, finance, or context.
Answer
The correct option is: Use break-even output to judge unit contribution, owners impact, and the business objective in Break-even.
Explanation
This option works because Use break-even output to judge unit contribution, owners impact, and the business objective in Break-even. The case evidence gives ?11,294, 494 units, and 23%, so the answer must explain the commercial effect rather than repeat a definition. The distractors are weaker because they confuse fixed and variable costs, miss the owners, or ignore the business objective.
Common mistake
Break-even common mistake 1
Giving a vague answer instead of directly addressing: Explain break-even output..
Answer by clearly explaining how to explain break-even output..
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