Which of the Following Is the Formula for Calculating Breakeven

question 34

Multiple Choice

Which of the following is the formula for calculating breakeven point?

• A) Fixed Costs/(Price - Variable Costs)
• B) Fixed Costs - Variable Cost/Price
• C) (Fixed Costs/Variable Costs) - Price
• D) (Fixed Costs/Price) - Variable Costs
• E) Fixed Cost - (Price + Variable Costs)

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Definitions:

Activity-Based Costing

An accounting method that assigns costs to products or services based on the activities and resources used in the production or delivery process.

Activity Rate

In cost accounting, it's the cost driver rate used in activity-based costing to assign indirect costs to products or services based on each activity's frequency and intensity.

Manufacturing Overhead

All manufacturing costs that cannot be directly traced to individual units produced, such as electricity, maintenance, and factory management salaries.

Activity-Based Costing

A method of accounting that assigns costs to products or services based on the activities required to produce them, aimed at providing more accurate costs.