Question

Target profit analysis Blank______.



Multiple select question.

can only be done using the formula method


estimates sales needed to earn a given profit


is similar to break-even analysis

Answer 1

Target profit analysis can be characterized by the following statements:

- **Estimates sales needed to earn a given profit**: This is true. Target profit analysis is used to determine the level of sales required to achieve a specific profit target.

- **Is similar to break-even analysis**: This is also true. Both analyses assess sales levels, but target profit analysis focuses on achieving a predetermined profit, while break-even analysis looks at the sales level needed to cover total costs with no profit or loss.

The statement **can only be done using the formula method** is not accurate, as target profit analysis can be conducted using various methods, including graphical analysis or numerical methods, in addition to the formula method.

So the correct selections for the statements that accurately describe target profit analysis are:
- Estimates sales needed to earn a given profit
- Is similar to break-even analysis