The content areathe point of zero profit is called the: Break-even point.
<h3>
What is the Break-even point?</h3>
- By dividing the fixed production costs by the price per unit less the variable production costs, the breakeven point is determined in accounting.
- The production level at which a product's expenses and revenues are equal is known as the breakeven point.
- When an asset's market price equals its initial cost, this is referred to as reaching the breakeven point in investment.
- There are several circumstances in which breakeven points might be used.
- Traders also use BEPs to analyze deals, calculating the price a security must reach to precisely pay all trade-related expenses such as taxes, commissions, management fees, and so forth.
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Answer:
C. Responsibility accounting
Explanation:
The correct answer is C.
Responsibility accounting is a concept of accounting that is used as performance measurement. The main idea is that big and varied organizations are difficult, and almost impossible to manage as one segment, therefore they must be cut into parts or separated into parts that can be managed. These parts, are called responsibility centers that include:
1. Cost centers,
2. Revenue centers,
3. profit centers, and
4. investment centers.
This approach gives room for responsibility to be given to the manager in these parts that have the biggest amount of influence over the key elements that are to be managed.
It is to be noted that the company is not allocating resources efficiently. See the attached image for the Graphically illustration required.
<h3>What is allocation of resources?</h3>
This is simply the ability to efficiently distribute resources across all aspects of production.
<h3>What is the proof that the company is misappropriating resources?</h3>
MRS is the gradient of the budget line is defined by the change in the Y axis divided by the change in the x axis.
In other words, MRS is the number of units of x that a customer is ready to give up in exchange for units of y.
Note that
the MRS fo the budget line is:
-dy/dx
= -10.6/6.25
= -1.6, that is media 1.6 units of media is given for every unit of business travel.
However, the corporation claims that the MRS is -1, which indicates that for every unit of business trip, they give away one unit of media. In other words, they are paying a price equal to the cost of business travel, resulting in a resource misappropriation.
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Because a decrease in real autonomous spending results in a <u>fall</u> in the price level, the ultimate effect on real GDP is<u> smaller</u> that predicted by the multiplier.
Another significant discovery is made by Keynesian economics. You've learnt that Keynesians think fluctuations in total spending are what ultimately determine the level of economic activity in the short run (or aggregate demand).
Assume that full employment prevails in an economy because the macro equilibrium occurs at the potential GDP.
Keynes noted that even while the economy starts at potential GDP, it is improbable that it will stay there because aggregate demand has a propensity to fluctuate.
In 2007, the collapse of the housing market caused a decline in U.S. investment spending. The Great Recession subsequently hit the American economy as a result.
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Thank you for the 5 points
