Use the figure for the question(s) below.
-The EBIT break-even point can be calculated using which of the following formulas?
A) (Units Sold × Sale Price) - (Units Sold × Cost per unit) - SG&A - Depreciation = 0
B) (Units Sold × Sale Price) + (Units Sold × Cost per unit) - SG&A - Depreciation = 0
C) (Units Sold × Sale Price) - (Units Sold × Cost per unit) + SG&A + Depreciation = 0
D) (Units Sold × Sale Price) + (Units Sold × Cost per unit) + SG&A - Depreciation = 0

Question

Use the figure for the question(s) below. 
-The EBIT break-even point can be calculated using which of the following formulas?
A) (Units Sold × Sale Price) - (Units Sold × Cost per unit) - SG&A - Depreciation = 0 
B) (Units Sold × Sale Price) + (Units Sold × Cost per unit) - SG&A - Depreciation = 0 
C) (Units Sold × Sale Price) - (Units Sold × Cost per unit) + SG&A + Depreciation = 0 
D) (Units Sold × Sale Price) + (Units Sold × Cost per unit) + SG&A - Depreciation = 0

Quizplus · Accepted Answer

The correct formula for calculating the EBIT (Earnings Before Interest and Taxes) break-even point is: (Units Sold × Sale Price) - (Units Sold × Cost per unit) - SG&A - Depreciation = 0. This formula calculates the point at which revenues cover all operating expenses, excluding interest and taxes, leading to an EBIT of zero.

Use the Figure for the Question(s) Below