# ECONOMICS

## COST ACCOUNTING

### BREAK EVEN POINT

 Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
On a break even chart, which line starts at zero?
 A Total Revenue B Fixed Costs C Total Costs D Variable Costs
Explanation:

Detailed explanation-1: -It is also known as Cost Volume Profit graph. Break-even point i.e., intersection point of the chart, shows the level of sales wherein total revenue is equal to the total costs and net income is equal to zero. Any number below the break-even point constitutes a loss while any number above it shows a profit.

Detailed explanation-2: -– Variable Costs (VC). The variable-cost line starts from the origin 0, because if no goods are produced, there will be no Variable Costs (VC).

Detailed explanation-3: -The break-even point is the point at which total revenue is equal to total cost. At this point, the profit is zero. (A particular company neither makes nor loses money at this point).

Detailed explanation-4: -A break-even graph shows a break-even point (BEP) visually. A break-even graph shows the revenue, costs, number of products sold and BEP.

Detailed explanation-5: -A firm’s break-even point occurs when at a point where total revenue equals total costs.

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