Breakeven point represents the condition, when the company runs under no profit no loss condition. In break even analysis, total cost comprises of fixed cost________________?
Correct answer: B. Plus variable cost
- A. Only
- B. Plus variable cost
- C. Plus overhead cost
- D. Plus selling expenses
Explanation
At break-even, total revenue equals total cost, and total cost is the sum of fixed cost and variable cost. Fixed costs remain unchanged with production level, whereas variable costs change with output.
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