Which of the following is true of the breakeven point?
A) It sets in advance cost targets in all aspects of product design and production.
B) It is the volume of sales where there is neither profit nor loss.
C) It is the amount of revenue expected from sales for a given period in the future.
D) It is the specific amount of profit one expects to achieve.

Question

Quizplus · Accepted Answer

The breakeven point is the volume of sales at which total costs equal total revenue, resulting in neither profit nor loss. Option A is incorrect because the breakeven point doesn't set cost targets; rather, it helps determine the minimum amount of revenue needed to cover costs. Option C is incorrect because it refers to expected revenue rather than the point where costs and revenue intersect. Option D is incorrect because the breakeven point is not a profit target.

Which of the Following Is True of the Breakeven Point