break-even point (BEP)= [Fixed cost ÷ (Unit price − __________)].
A) Total cost
B) Total expense
C) Marginal revenue
D) Unit variable cost
E) Total number of units produced or quantity

Question

Quizplus · Accepted Answer

The break-even point formula requires the unit variable cost to be subtracted from the unit price in the denominator. This is because the contribution margin (unit price - unit variable cost) is what covers the fixed costs and leads to profitability. Therefore, the correct answer is D) Unit variable cost.

Break-Even Point (BEP)= [Fixed Cost ÷ (Unit Price − __________)]