In a food business, break-even analysis helps in which decision?
Answer and explanation
Correct answer: Understanding the minimum sales required and feasibility of pricing
Break-even analysis shows the level of sales needed to recover total cost, including fixed and variable costs. Therefore, it helps a food business judge the minimum sales target and whether a proposed price is feasible. Decisions about plating colours or shop decoration are not directly related to the cost–revenue balance. Exam tip: at the break-even point, total revenue equals total cost, so there is neither profit nor loss.
Frequently asked questions
What is the correct answer to this question?
Understanding the minimum sales required and feasibility of pricing
Why is this the correct answer?
Break-even analysis shows the level of sales needed to recover total cost, including fixed and variable costs. Therefore, it helps a food business judge the minimum sales target and whether a proposed price is feasible. Decisions about plating colours or shop decoration are not directly related to the cost–revenue balance. Exam tip: at the break-even point, total revenue equals total cost, so there is neither profit nor loss.
Which subject and chapter does this question cover?
This is a Class 11 Home Science question. Chapter: Work, Livelihood and Career. Topic: Traditional occupations in India - Indian cuisine.
