At the breakeven point, the contribution margin
A) is at a maximum.
B) minus total fixed costs equals a positive number.
C) equals fixed costs.
D) is at a minimum.

Question

Quizplus · Accepted Answer

At the breakeven point, the total sales revenue equals the total variable costs plus total fixed costs. This means that the contribution margin (sales revenue minus variable costs) equals fixed costs. Therefore, option C is correct. Option A is incorrect because contribution margin is not maximum at breakeven point, it is zero. Option B is incorrect because at breakeven point, the contribution margin minus fixed costs equals zero, not a positive number. Option D is incorrect because there is no maximum or minimum contribution margin at breakeven point, it is zero.

At the Breakeven Point, the Contribution Margin