The breakeven point revenues is calculated by dividing ________.
A) fixed costs by total revenues
B) fixed costs by contribution margin percentage
C) total revenues by fixed costs
D) contribution margin percentage by fixed costs

Question

Quizplus · Accepted Answer

The breakeven point revenues can be calculated by dividing the fixed costs by the contribution margin percentage. Contribution margin is the difference between the selling price per unit and the variable costs per unit. It represents the amount available to cover the fixed costs and contribute to profits. Therefore, by dividing the fixed costs by the contribution margin percentage, we can determine the amount of revenue needed to cover all the costs and break even.

The Breakeven Point Revenues Is Calculated by Dividing ________