Question

The break-even point in units is represented by the equation? (a) Fixed costs / Variable costs (b) Fixed costs / selling price per unit (c) (Sales revenue - Fixed costs) / Contribution per unit (d) Fixed costs / Contribution per unit​

Answer 1

Explanation:

Break-even price is calculated by using this formula = (Total fixed cost/Production unit volume) + Variable Cost per unit.

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Answer 2

It is denoted by Fixed costs / Contribution per unit​.

• It is the moment at which total cost and income are equal, demonstrating that the business is profitable.
• There is no possible benefit or loss.
• It is represented as - BEP = Fixed costs / Contribution per unit​.
• At this stage, consumption equals a significant amount of money.
• Although at this point the risk-adjusted anticipated return has been reached, the cost of chance has been paid.