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Author Question: Break-even charts are useful at times. What are some of their weaknesses? What will be an ideal ... (Read 39 times)

charchew

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on: Aug 10, 2018
Break-even charts are useful at times. What are some of their weaknesses?
 
  What will be an ideal response?

Question 2

The purpose of merchandising is twofold: to retain a store's loyal customer base and to increase the percentage of total business generated by these loyal customers.
 
  Indicate whether the statement is true or false


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hramirez205

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Reply #1 on: Aug 10, 2018
Answer to Question 1

Useful as they are, break-even charts can be only a rough approximation of profit. This is, in part, because assumptions must be made regarding allocation of costs. Cost allocations are good only over short ranges of sales volume. When they are extrapolated beyond that range, the analysis is less exact. In addition, this analysis works best when there is only one product. In a restaurant where there are many items on the menu, mark-ups will vary and an average will have to be used. This limits the accuracy of the analysis.

Answer to Question 2

TRUE


charchew

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Reply 2 on: Aug 10, 2018
Thanks for the timely response, appreciate it

bigcheese9

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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