The break-even point in CVP analysis is defined as:
A)revenues less variable costs equal operating profit.
B)when the contribution margin percentage equals total revenues divided by variable costs.
C)when fixed costs equal total revenues.
D)fixed costs divided by the contribution margin per unit.

Question

Quizplus · Accepted Answer

The break-even point is where total revenues equal total costs (fixed costs + variable costs). This can be calculated either in units or in dollars. The formula to calculate the break-even point in units is: fixed costs / contribution margin per unit. Therefore, choice D is the correct answer.

The Break-Even Point in CVP Analysis Is Defined As