[amp_mcq option1=”Contribution = Fixed assets” option2=”Sales revenue = Total cost – Variable cost” option3=”Profit = Fixed cost + Variable cost” option4=”Sales revenue = Variable cost” correct=”option2″]<\/p>\n
The correct answer is: B. Sales revenue = Total cost – Variable cost<\/strong><\/p>\n Break-even point is the point at which a company’s total revenue equals its total costs. At this point, the company neither makes a profit nor incurs a loss.<\/p>\n The formula for break-even point is:<\/p>\n Break-even point = Fixed costs \/ Contribution margin<\/p>\n Contribution margin is the amount of revenue that remains after variable costs have been deducted. It is calculated as:<\/p>\n Contribution margin = Sales revenue – Variable costs<\/p>\n Therefore, at break-even point, sales revenue equals total cost minus variable cost.<\/p>\n Option A is incorrect because contribution does not equal fixed assets. Contribution is the amount of revenue that remains after variable costs have been deducted, while fixed assets are the costs that do not change with the level of production.<\/p>\n Option C is incorrect because profit does not equal fixed cost plus variable cost. Profit is the amount of revenue that remains after all costs have been deducted, while fixed cost and variable cost are only two types of costs.<\/p>\n Option D is incorrect because sales revenue does not equal variable cost. Sales revenue is the total amount of money that a company receives from selling its products or services, while variable cost is the cost of producing each unit of product or service.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”Contribution = Fixed assets” option2=”Sales revenue = Total cost – Variable cost” option3=”Profit = Fixed cost + Variable cost” option4=”Sales revenue = Variable cost” correct=”option2″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"class_list":["post-57467","post","type-post","status-publish","format-standard","hentry","category-costing","no-featured-image-padding"],"yoast_head":"\n