Which of the following is NOT true of the break-even point?
A)It represents the point where a firm's profits is equal to zero.
B)It represents the point where a firm's revenue is equal total costs
C)It represents the point where the sales revenue equals the total costs of a product.
D)It represents the number of units required to be produced to meet the annual profit goal.
E)It represents the number of units required to cover both variable and fix costs.

Question

Quizplus · Accepted Answer

The break-even point represents the point where a firm's revenue equals total costs, where sales revenue equals the total costs of a product, and where the number of units required to cover both variable and fixed costs. However, it does not represent the number of units required to be produced to meet the annual profit goal. The break-even point only indicates the minimum level of sales at which a firm can avoid losses, but a firm may want to produce more than the break-even point to generate profits.

Which of the Following Is NOT True of the Break-Even