Breakeven point is the point at which:
A) total costs equal gross revenue.
B) fixed costs equal variable costs.
C) total costs equal profit.
D) variable costs equal gross revenue.

Question

Quizplus · Accepted Answer

The breakeven point is the level of sales at which total costs equal gross revenue, meaning that there is neither profit nor loss. Therefore, option A is the correct choice. Option B is incorrect because fixed costs and variable costs must both be accounted for in determining total costs but are not necessarily equal to each other. Option C is incorrect because total costs are not equal to profit, as profit is what remains after subtracting total costs from total revenue. Option D is incorrect because variable costs are only a portion of total costs, which also include fixed costs.

Breakeven Point Is the Point at Which