Which of the following statements about the break-even point is true?
A) It is used to determine how many more units need to be sold to increase market share by a specific amount.
B) It is a technique used to calculate fixed costs.
C) It determines the amount of retained earnings a company will have during an accounting period.
D) It is a technique marketers use to examine the relationship between supply and demand.
E) It is calculated using contribution per unit costs and total fixed costs.

Question

Quizplus · Accepted Answer

The break-even point is the point at which a company's total revenue equals its total costs, resulting in a net profit of zero. It is calculated using contribution per unit costs (the amount each unit sold contributes to covering fixed costs and generating profit) and total fixed costs (costs that do not vary with the level of production or sales). Therefore, option E is the correct statement about the break-even point.

Which of the Following Statements About the Break-Even Point Is