FCS Corporation sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows:

Point A is best described as:
A) Fixed cost
B) Margin of safety
C) Estimated profit at actual volume
D) Breakeven point

Question

FCS Corporation sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows:
 
Point A is best described as:
A) Fixed cost 
B) Margin of safety 
C) Estimated profit at actual volume 
D) Breakeven point

Quizplus · Accepted Answer

Point A represents the breakeven point, where total revenue equals total costs (both fixed and variable). It is the point at which the company is neither making a profit nor incurring a loss.

FCS Corporation Sells Its Single Product for $14 Per Unit