The break-even point is equal to
A) fixed costs divided by (sales price per unit - variable cost per unit).
B) fixed costs divided by unit variable costs.
C) fixed costs divided by selling price per unit.
D) (sales price per unit - variable cost per unit) times the fixed costs.

Question

Quizplus · Accepted Answer

The break-even point is the point at which total revenue equals total costs. In order to calculate the break-even point, we need to know the fixed costs, the selling price per unit, and the variable cost per unit. The formula for the break-even point is fixed costs divided by (sales price per unit - variable cost per unit). Choice A provides the correct formula for calculating the break-even point.

The Break-Even Point Is Equal to