Assertion: Breakeven analysis is helpful in setting profit goal and sales target.
Reasoning: Break–even analysis is more important in case of operating a multiple product business as compared to single product.
Answer & explanation
Correct answer: option 3
Usefulness of break–even analysis continues to be the same whether you are operating a single product or multiple product business. It helps in setting profit goal and sales target. In a manufacturing environment, it helps in determining the products that are not contributing to meet the fixed expenses and thus brings up the item for discussion in management meetings about its continuity.