Question

Which traditional technique of managerial control involves a study of relation between costs, volume and profits.

Options

• Personal Observation

• Statistical Reports

• Break-Even Analysis

• All of the above

Answer 1

Break-Even Analysis

Explanation -

Break-Even Analysis : It entails examining the relationship between costs, volume, and profits. The breakeven point is the number of sales at which there is no profit or loss. It is calculated when the whole expense incurred equals the total revenue generated. The manager can estimate the expenses and profits to the organisation at various levels of quantity using this technique, and so determine the level at which profit can be maximised.