Ming-tao was trying to figure out how much revenue he would have to bring in on a specific product to start earning a profit. He wanted to know the point at which the total sales at a given price level needed to produce zero profits, but cover costs. To determine the this, he needs to know the fixed costs and
A) markup.
B) expected unit sales.
C) contribution margin.
D) unit variable cost.

Question

Quizplus · Accepted Answer

To determine the point at which total sales produce zero profits but cover costs (known as the break-even point), Ming-tao needs to know the fixed costs and the contribution margin. The contribution margin is the amount by which the sale of one unit exceeds its variable cost, which is crucial for calculating how many units need to be sold to cover fixed costs and start earning a profit.

Ming-Tao Was Trying to Figure Out How Much Revenue He