Phil asks you to calculate the break-even point for his firm. You respond that you will need the following information:
A) the values for all assets and liabilities.
B) total fixed costs, selling price per unit, and variable costs per unit.
C) forecasted sales volume, operating expenses, and asset values.
D) sales revenue and total liabilities.

Question

Quizplus · Accepted Answer

The break-even point is the point at which the total revenue of a business equals the total cost, resulting in neither profit nor loss. To calculate it, we need to know the total fixed costs (which do not vary with the level of production), the selling price per unit, and the variable costs per unit (which vary with the level of production). Therefore, option B is the correct choice. The other options do not provide the necessary information to calculate the break-even point.

Phil Asks You to Calculate the Break-Even Point for His