[amp_mcq option1=”Where total revenue equals total costs” option2=”Where total revenue equals total fixed cost” option3=”Where total revenue equals total variable cost” option4=”Where total revenue exceeds the total costs” correct=”option1″]
The correct answer is: A. Where total revenue equals total costs.
The break-even point is the point at which a company’s total revenue equals its total costs. At this point, the company is neither making nor losing money.
Option B is incorrect because total fixed costs are the costs that do not change with the level of production. These costs include rent, insurance, and depreciation.
Option C is incorrect because total variable costs are the costs that change with the level of production. These costs include the cost of materials and labor.
Option D is incorrect because total revenue exceeds the total costs when the company is making a profit.