COST ACCOUNTING
BREAK EVEN POINT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Helps to identify fixed and variable costs
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Helps to set the selling price
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Helps to calculate future revenue
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None of these
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Detailed explanation-1: -Total profit at the break-even point is zero.
Detailed explanation-2: -A break-even analysis is a financial calculation that weighs the costs of a new business, service or product against the unit sell price to determine the point at which you will break even. In other words, it reveals the point at which you will have sold enough units to cover all of your costs.
Detailed explanation-3: -Answer and Explanation: A) the point where total profit equals total fixed expenses. This is incorrect because, at the break-even point, the total contribution margin and the total fixed costs are equal.
Detailed explanation-4: -Which of the following statements is correct about the break-even point? The break-even point is the point where a company achieves its target profit. The break-even point is the point where all variable costs are covered (but fixed costs are not).