COST ACCOUNTING
BREAK EVEN POINT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Total costs are less than total revenue
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Variable costs are equal to total revenue
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Total costs are equal to total revenue
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Total costs are greater than total revenue
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Detailed explanation-1: -The correct answer is ‘True. ‘ Break-even point is the point where revenues equal the total of all expenses including the cost of goods sold. If revenues minus all expenses (fixed and variable, and including cost of goods sold) equals zero, you are at the break-even point.
Detailed explanation-2: -Total profit at the break-even point is zero.
Detailed explanation-3: -The correct answer is a) Statements 1) and 3) are correct. The company starts by deciding the sales mix and computes the break-even analysis afterwards. The contribution margin ratio is computed by deducting variable cost from sales then dividing the difference by sales.
Detailed explanation-4: -The break-even point is the point at which total cost and total revenue are equal, meaning there is no loss or gain for your small business. In other words, you’ve reached the level of production at which the costs of production equals the revenues for a product.
Detailed explanation-5: -A firm’s break-even point occurs when at a point where total revenue equals total costs. Break-even analysis depends on the following variables: Selling Price per Unit:The amount of money charged to the customer for each unit of a product or service.