Abby is a marketing consultant who specializes in small businesses. Her current client is very interested in estimating the costs for the coming year, in order to find the breakeven point. Abby knows this is an important financial statistic because below the breakeven point, the firm is operating
A) with fixed costs only.
B) with minimal variable costs.
C) with no revenue.
D) with minimal profit.
E) at a loss.

Question

Quizplus · Accepted Answer

The breakeven point is the level of sales at which total revenue equals total costs. Below the breakeven point, the firm is not generating enough revenue to cover its total costs, resulting in a net loss. Therefore, the best answer is E: at a loss.

Abby Is a Marketing Consultant Who Specializes in Small Businesses