Asked by Megan Shook on Jul 17, 2024
Verified
The break-even point is where total sales equal total fixed costs.
Break-Even Point
The point at which total costs equal total revenue, meaning there is no profit or loss.
Total Sales
The aggregate revenue a company generates from selling goods or services within a specified period.
Fixed Costs
Costs that do not fluctuate with changes in production level or sales volume, such as rent, salaries, and insurance.
- Comprehend the concept of break-even, including how to calculate it and its relevance in making business decisions.
Verified Answer
LT
Lorena TretoJul 20, 2024
Final Answer :
False
Explanation :
The break-even point is where total sales equal total costs (fixed plus variable costs), not just total fixed costs.
Learning Objectives
- Comprehend the concept of break-even, including how to calculate it and its relevance in making business decisions.