When Coca-Cola considers their variable production costs, fixed costs, and revenue, they begin making money when revenue is 85 percent of total costs. This is referred to as their:
A)coverage amount.
B)incremental return quantity.
C)break-even point.
D)point of maximum profit.

Question

Quizplus · Accepted Answer

The break-even point is the level of sales at which total revenue equals total costs, resulting in neither a profit nor a loss. In this case, Coca-Cola begins making money when revenue reaches 85 percent of total costs, which indicates they have passed the break-even point.

When Coca-Cola Considers Their Variable Production Costs, Fixed Costs, and Revenue