The breakeven point is .
A) where selling one more unit will not increase income
B) where contribution margin equals fixed costs
C) where total revenues equal contribution margin
D) fixed costs divided by revenues equals zero

Question

Quizplus · Accepted Answer

The breakeven point is where the contribution margin (selling price minus variable costs) equals fixed costs. At this point, the company is just earning enough to cover its costs and is not making a profit. Therefore, option B is the correct answer. Options A, C, and D are not accurate definitions of the breakeven point.

The Breakeven Point Is