Which statement best describes the break-even point?
A) Profit is greater than zero.
B) Total revenue minus total cost.
C) Total contribution margin equals total fixed cost.
D) Total contribution margin equals total variable cost.

Question

Quizplus · Accepted Answer

The break-even point is the point at which a company generates enough revenue to cover its fixed costs, where the total contribution margin (difference between sales revenue and variable costs) equals the total fixed cost. At this point, the company is not making a profit nor experiencing a loss. Therefore, Choice C is the best description of the break-even point.

Which Statement Best Describes the Break-Even Point