The breakeven point is where
A) total assets equal total liabilities plus owner's equity.
B) total revenue equals total costs.
C) fixed cost equals variable cost.
D) total profit equals total costs.

Question

Quizplus · Accepted Answer

The breakeven point is the level of production or sales at which total revenue equals total costs. At this point, there is no profit or loss. Option A is the definition of the accounting equation, but it is not directly related to the breakeven point. Option C is true for the breakeven point formula (Breakeven Point = Fixed Costs ÷ (Price - Variable Costs)) but is not the definition of the breakeven point. Option D is not correct as there can be profit or loss at any level of production or sales, except at the breakeven point where profit is zero.

The Breakeven Point Is Where