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:

Cumulative Preferred Stock

A type of preferred stock that entitles shareholders to receive dividends in arrears before any dividends can be distributed to common stockholders.

Par Common Stock

The nominal or face value assigned to common shares by the company's charter, which has little relation to the market value of the shares.

Stock Dividend

A dividend payment made in the form of additional shares rather than a cash payout.

Retained Earnings

Profits that are held back in a company to be reinvested in its operations or to pay down debt rather than being distributed to shareholders as dividends.