Question

What information provided by a variable costing income statement is used in computing the break-even point?

Answer 1

Break-even point when Revenue = Total Variable cost + Total Fixed cost. Loss when Revenue < Total Variable cost + Total Fixed cost.

Answer 2

ANSWER :

Break even quantity = Fixed costs / (Sales price per unit – Variable cost per unit)

Fixed costs are costs that do not change with varying output (e.g., salary, rent, building machinery).

Sales price per unit is the selling price (unit selling price) per unit.

Variable cost per unit is the variable costs incurred to create a unit.