Which of the following is true of the break-even point?
A) It represents the point where a firm's profits is equal to that of its primary competitor.
B) It represents the point where a firm's revenue is proportionate to its market share.
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 resources required to produce goods within the fixed labor costs.

Question

Quizplus · Accepted Answer

The break-even point represents the point where the sales revenue equals the total costs of a product. This means a company is neither making a profit nor facing a loss at this point. It helps companies to determine the minimum amount of sales they need to achieve to cover all their costs, which is useful in setting pricing strategies and production targets.

Which of the Following Is True of the Break-Even Point