Which of the following statements is true about breakeven analysis?
A) The breakeven point can only be stated in terms of sales revenue.
B) At the breakeven point, the firm's fixed costs are greater than its variable costs.
C) At the breakeven point, the firm's fixed costs are less than its variable costs.
D) At the breakeven point, the firm's sales price per unit equals its variable cost per unit.
E) At the breakeven point, the firm's sales revenue equals the sum of its fixed and variable costs.

Question

Quizplus · Accepted Answer

At the breakeven point, the firm's sales revenue equals the sum of its fixed and variable costs. This means that the firm is generating just enough sales revenue to cover all of its costs, both fixed and variable. The breakeven point can be calculated in terms of units sold, as well as in terms of sales revenue.

Which of the Following Statements Is True About Breakeven Analysis