[amp_mcq option1=”fixed expenses and the contribution margin ratio” option2=”variable expenses and the contribution margin ratio” option3=”fixed expenses and the unit contribution margin” option4=”variable expenses and the unit contribution margin” correct=”option3″]
The correct answer is C. fixed expenses and the unit contribution margin.
The break-even point is the point at which a company’s revenue equals its costs. It is calculated by dividing fixed expenses by the unit contribution margin. The unit contribution margin is the amount of revenue that remains after a company has covered its variable costs.
Option A is incorrect because the contribution margin ratio is not used to calculate the break-even point. The contribution margin ratio is the percentage of revenue that remains after a company has covered its variable costs.
Option B is incorrect because variable expenses are not used to calculate the break-even point. Variable expenses are the costs that change in proportion to the number of units produced or sold.
Option D is incorrect because the unit contribution margin is used to calculate the break-even point. The unit contribution margin is the amount of revenue that remains after a company has covered its variable costs.