If Q equals the level of output, P is the selling price per unit, V is the variable expense per unit, and F is the fixed expense, then the break-even point in units is
A)Q/(P-V).
B)F/(P-V).
C)V/(P-V).
D)F/[Q(P-V)].

Question

Quizplus · Accepted Answer

The break-even point is the level of output at which total revenue equals total cost. Therefore, to find the break-even point in units, we need to solve for Q in the equation: 
TR = TC 
Q × P = (Q × V) + F 
Q × (P - V) = F 
Q = F / (P - V)
Therefore, the break-even point in units is F / (P - V), which is the same as option B.

If Q Equals the Level of Output, P Is the Selling