The breakeven point in CVP analysis is defined as:
A)when fixed costs equal total revenues
B)fixed costs divided by the contribution margin per unit
C)revenues less variable costs equal operating income
D)when the contribution margin percentage equals total revenues divided by variable costs

Question

Quizplus · Accepted Answer

The breakeven point in CVP analysis is when the total contribution margin is equal to the total fixed costs. In other words, it is the point at which a company's total sales revenue equals its total variable costs plus its total fixed costs. The formula for calculating the breakeven point in units is total fixed costs divided by the contribution margin per unit. Therefore, choice B is the correct answer.

The Breakeven Point in CVP Analysis Is Defined As