COST ACCOUNTING
FINANCIAL TERMINOLOGY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Total revenue is greater than total fixed costs
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Total revenue is less than total variable costs
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Total costs are greater than total revenue
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Total costs are less than total revenue
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Detailed explanation-1: -Total Revenue-Total cost = Profit.
Detailed explanation-2: -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.
Detailed explanation-3: -Revenue is the total amount of income generated by the sale of goods or services related to the company’s primary operations. Revenue, also known as gross sales, is often referred to as the “top line” because it sits at the top of the income statement. Income, or net income, is a company’s total earnings or profit.
Detailed explanation-4: -When the total revenue is equal to the total cost, the firm is not making any additional profit but is also not in loss. The earnings are equal to the expense hence it is called the break even point.