It is important for a company to know the level of sales at which it covers all its variable and fixed operating costs. This level of sales is best described as the:
A) gross profit margin.
B) contribution margin.
C) operating break even.
D) operating profit margin.

Question

Quizplus · Accepted Answer

Operating break-even refers to the level of sales at which a company covers all its variable and fixed operating costs, resulting in a net income of zero. This point is crucial for understanding the financial health and sustainability of a business.

It Is Important for a Company to Know the Level