Which of the Following Is Correct? the Break-Even Point Occurs

question 2

Multiple Choice

Which of the following is correct? The break-even point occurs on the CVP graph where:

• A) total profit equals total expenses.
• B) total profit equals total fixed expenses.
• C) total contribution margin equals total fixed expenses.
• D) total variable expenses equal total contribution margin.

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Definitions:

Expensed

Refers to the accounting practice of recognizing a cost as an expense in the income statement in the period it is incurred.

Maintenance

The process of preserving a condition or situation or the process of keeping something in working order by regularly servicing it.

Non-interest-bearing Note

A promissory note or loan agreement that does not accrue interest over time, requiring the borrower to repay only the principal amount.

Present Value

The current worth of a future sum of money or stream of cash flows, discounted at a specified rate of return.