COST ACCOUNTING
BREAK EVEN POINT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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In which two of the following situations would a business be in a loss making situation? Select two answers:Where:
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Total revenue is greater than the sum of total fixed costs and total variable costs
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Total revenue is less than total variable costs and total fixed costs
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Total fixed costs and total variable costs are lower than total revenue
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Total costs are less than total revenue
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Total costs are higher than total revenue
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Explanation:
Detailed explanation-1: -Revenue, also known simply as “sales", does not deduct any costs or expenses associated with operating the business.
Detailed explanation-2: -Total revenue, also known as gross revenue, is your total revenue from recurring (MRR) and non-recurring revenue streams. In other words, it’s the total amount of income your company brings in from selling your products/services.
Detailed explanation-3: -The revenue is defined as the total income a business receives from selling a good or service to its customers. The cost is defined as the total expenses that are incurred in the production of goods or services by any individual or organisation.
Detailed explanation-4: -Total Revenue-Total cost = Profit.
There is 1 question to complete.