Which of the following equations represents a breakeven point?

Question

Quizplus · Accepted Answer

The breakeven point is the point at which total revenue equals total costs. In this case, the equation Sales Price - Variable Cost = Fixed Cost represents the breakeven point. This is because sales price minus variable cost represents the contribution margin, which is the amount each unit sold contributes to covering fixed costs. Setting the contribution margin equal to fixed costs gives the quantity of units that must be sold to cover all costs, which is the breakeven point. Therefore, option D (Sales Price - Variable Cost = Fixed Cost) is the correct choice.

Which of the Following Equations Represents a Breakeven Point