BUSINESS ADMINISTRATION
BUSINESS MATHEMATICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Breakeven Point
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the price at which merchandise is offered for sale just to cover the cost and the operating expenses
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means that it does not make any profit nor incur any loss
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Is the amount (if any) which remains after the cost of goods and operating expenses have been paid
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the additional amount of cost price and operating expenses
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Detailed explanation-1: -What is Break-even Point? Break-even point (BEP) is a term in accounting that refers to the situation where a company’s revenues and expenses were equal within a specific accounting period. It means that there were no net profits or no net losses for the company – it “broke even”.
Detailed explanation-2: -Definition: The Break-Even Point (BEP) is the point at which cost or expenses and revenue are equal: there is no net loss or gain, and one has “broken even.” A profit or loss has not been made. (Wikipedia.com). Importance: The BEP tells an owner the amount of revenue needed to cover all expenses, including fixed costs.
Detailed explanation-3: -A break-even analysis is a useful tool for determining at what point your company, or a new product or service, will be profitable. Put another way, it’s a financial calculation used to determine the number of products or services you need to sell to at least cover your costs.
Detailed explanation-4: -To calculate the break-even point in units use the formula: Break-Even point (units) = Fixed Costs ÷ (Sales price per unit – Variable costs per unit) or in sales dollars using the formula: Break-Even point (sales dollars) = Fixed Costs ÷ Contribution Margin. Here’s What We’ll Cover: What Is the Break-Even Point?