The Break-Even Point Is That Level of Activity Where

question 77

Multiple Choice

The break-even point is that level of activity where:

• A) total revenue equals total cost.
• B) variable cost equals fixed cost.
• C) total contribution margin equals the sum of variable cost plus fixed cost.
• D) sales revenue equals total variable cost.
• E) profit is greater than zero.

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Definitions:

Solvency

The ability of an entity to meet its long-term financial liabilities and obligations.

Current Liabilities

Obligations that a company needs to pay off within one year or within the business's normal operating cycle.

Current Position Analysis

Current position analysis is a review of the operations, resources, and financial health to evaluate a company's current state.

Return

The income produced by an investment, typically expressed as a percentage of the investment’s cost.