The break-even quantity is
A)Fixed Costs/Price
B)Fixed Costs/Marginal Cost
C)Fixed Costs/(Price - Marginal Costs)
D)Contribution Margin/Fixed Costs

Question

​The break-even quantity is
A)​Fixed Costs/Price
B)Fixed Costs/Marginal Cost
C)Fixed Costs/(Price - Marginal Costs)
D)​Contribution Margin/Fixed Costs

Quizplus · Accepted Answer

The break-even quantity is the point where a company's total revenue is equal to total costs. Therefore,
Total Revenue = Total Cost
Price x Quantity = Fixed Cost + (Marginal Cost x Quantity)
Price x Quantity - Marginal Cost x Quantity = Fixed Cost
Quantity (Price - Marginal Cost) = Fixed Cost
Quantity = Fixed Costs / (Price - Marginal Costs)

​The Break-Even Quantity Is

The Break-Even Quantity Is