Business FinancesQuestion 1119 of 1605
The break-even point is best defined as the level of sales at which:
a.Gross revenue equals overhead only
b.Variable costs equal fixed costs
c.Total revenue exactly equals total costs, so profit is zero
d.Profit is maximized
Explanation
Break-even is the sales volume at which total revenue equals total costs (fixed plus variable), producing exactly zero profit and zero loss. Sales above break-even generate profit; sales below it produce a loss.
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