Which of the following is a limitation of break-even analysis?
a.
It does not give weightage to the cost of labor that is incurred during production.
b.
It is applicable only when the demand for a product is elastic.
c.
It is hard to determine which costs are fixed and which costs are variable.
d.
It does not give an estimate of how much profit can be earned once the break-even point is obtained.
Answer: c.
It is hard to determine which costs are fixed and which costs are variable.