Which of the Following Is an Equation to Determine the Break-Even

question 39

Multiple Choice

Which of the following is an equation to determine the break-even point (BEP) in units?

• A)BEP = fixed cost / selling price per unit - variable cost per unit)
• B)BEP = fixed cost / (selling price per unit - variable cost per unit)
• C)BEP = variable cost / (selling price per unit - fixed cost)
• D)BEP = variable cost / (fixed cost - selling price per unit)
• E)BEP = fixed cost / (selling price per unit + variable cost per unit)

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Definitions:

Expressed

Typically refers to something stated explicitly or in a clear manner, often used in the context of contracts or mathematical terms.

Ratio

The expression of a financial statement item or set of items as a percentage of another financial statement item in order to measure an important economic relationship as a single number.

Solvency

The ability of an entity to meet its long-term financial commitments and debts as they come due.

Liquidity

A measure of how quickly and easily an asset can be converted into cash without significantly affecting its price.