The break-even point is that level of activity where:
A) variable cost equals fixed cost.
B) contribution margin equals fixed cost.
C) total contribution margin equals the sum of variable cost plus fixed cost.
D) sales revenue equals total variable cost.
E) sales revenue equals fixed cost.

Question

Quizplus · Accepted Answer

The break-even point is the level of activity at which total revenues equal total costs, both fixed and variable, meaning there is no profit or loss. This is represented by the situation where the contribution margin (sales revenue minus variable costs) equals fixed costs.

The Break-Even Point Is That Level of Activity Where