Discount Electronics, a new company in the area, has reported break-even sales for its first month of operation. This means which of the following?
A) Revenues were equal to fixed costs.
B) Revenues were equal to variable costs.
C) Variable costs were equal to fixed costs.
D) Contribution margin was equal to fixed costs.

Question

Quizplus · Accepted Answer

Break-even is achieved when contribution margin (revenues less variable costs) equals fixed costs.

Discount Electronics, a New Company in the Area, Has Reported