The Point at Which the Costs of Producing a Product

question 36

Multiple Choice

The point at which the costs of producing a product equal the revenue earned from selling the product is

• A) elasticity of demand.
• B) the breakeven point.
• C) variable costs.
• D) price elasticity.
• E) the sum of fixed and variable costs.

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Definitions:

Budget

A financial plan that estimates income and expenditure for a specific period of time.

Equivalent Units

A concept used in process costing that converts partially completed units into a number of fully completed units, facilitating cost calculation.

Material Price Variance

A calculation that measures the difference between the actual cost of materials and the standard cost multiplied by the quantity purchased.

Purchased Quantity (PQ)

The total amount of a specific item that a company acquires from suppliers within a given time period, used for inventory management and cost control.