The accounting break-even point occurs when:
A) the total revenue line cuts the fixed cost line
B) the present value of inflows line cuts the present value of outflows line
C) the total revenue line cuts the total cost line
D) none of the above

Question

Quizplus · Accepted Answer

The accounting break-even point is when the total revenue line intersects with the total cost line, meaning that the company has generated enough revenue to cover all of its costs. Option A is incorrect because fixed costs are not factored into the calculation of the accounting break-even point. Option B is incorrect because it refers to the net present value calculation for a project or investment, not the accounting break-even point.

The Accounting Break-Even Point Occurs When