SXF Corporation sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows: Point A is best described as
A) Fixed cost
B) Margin of safety
C) Estimated profit at actual volume
D) Breakeven point

Question

SXF Corporation sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows:  Point A is best described as
A) Fixed cost 
B) Margin of safety 
C) Estimated profit at actual volume 
D) Breakeven point

Quizplus · Accepted Answer

Point A is the breakeven point, which represents the level of sales at which the company's total revenue equals total cost (fixed and variable). At this point, the company neither makes a profit nor incurs a loss.

SXF Corporation Sells Its Single Product for $14 Per Unit