The fixed cost is divided to contribution margin to calculate _____________?
Correct answer: B. breakeven revenue
- A. total revenue
- B. breakeven revenue
- C. fixed revenue
- D. variable revenue
Explanation
Break-even revenue is calculated by dividing fixed cost by the contribution margin ratio or percentage. Dividing fixed cost by contribution margin per unit instead would give break-even units, so the ratio is implied here.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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