In breakeven analysis, total cost is composed of ______.
A) price divided by number of units sold
B) variable costs minus fixed costs
C) total variable costs and total fixed costs
D) total sales minus expenses

Question

Quizplus · Accepted Answer

In breakeven analysis, total cost is composed of both total variable costs (which are costs that vary with the level of output, such as material and labor costs) and total fixed costs (which are costs that remain constant regardless of the level of output, such as rent and salaries). Therefore, the correct answer is C, which includes both total variable and fixed costs. Choices A, B, and D do not reflect the full composition of total cost.

In Breakeven Analysis, Total Cost Is Composed of ______