Which one of the following describes the break-even point?
A)It is the point where total sales equal total variable plus total fixed costs.
B)It is the point where the contribution margin equals zero.
C)It is the point where total variable costs equal total fixed costs.
D)It is the point where total sales equal total fixed costs.

Question

Quizplus · Accepted Answer

The break-even point is the point where the total sales revenue equals the total variable costs plus the total fixed costs. This means that the company has neither made a profit nor incurred a loss at this point. In other words, at the break-even point, the contribution margin equals the total fixed costs. Therefore, option A is the correct description of the break-even point.

Which One of the Following Describes the Break-Even Point