Which of the following is TRUE about the break-even point?
A) When sales are equal to the break-even point, profit will be zero.
B) When sales exceed the break-even point, profits will be negative.
C) When sales are below the break-even point, profits will be positive.
D) Once sales exceed the break-even point, profits no longer change if sales increase further.
E) The total revenue and total cost are equal at the point where profits are maximized.

Question

Quizplus · Accepted Answer

The break-even point is the level of sales at which total revenue equals total cost, therefore there is no profit or loss. Once sales exceed the break-even point, profits will be positive.

Which of the Following Is TRUE About the Break-Even Point