The breakeven point is calculated by dividing the sum of
A)the total fixed costs and shared costs by the difference between the price and the unit variable cost.
B)the total variable costs and shared costs by the difference between the price and the unit fixed cost.
C)the total fixed costs and variable costs by the difference between the price and the unit shared cost.
D)the total shared costs by the difference between the price and the sum of the total fixed costs.
E)the total fixed costs and shared costs by the difference between the price and the sum of the total variable costs.

Question

Quizplus · Accepted Answer

The breakeven point is the point at which total revenue equals total cost, therefore, the equation for breakeven point is: 
Price per unit x Quantity sold = Total fixed costs + Total variable costs
To calculate the breakeven point, the above equation is rearranged to solve for the quantity sold. 
Quantity sold = Total fixed costs + Total variable costs / Price per unit – Unit variable costs 
Therefore, the breakeven point is calculated by dividing the sum of the total fixed costs and shared costs by the difference between the price and the unit variable cost, as given in option A.

The Breakeven Point Is Calculated by Dividing the Sum of