Question

Break-even charts usually assume that:A. total cost and total revenue curves are straight lines.

B. average variable cost is constant per unit.
C. the break-even point is reached when total cost just equals total revenue.
D. any quantity can be sold at the assumed price.
E. All of the above.

Answer 1

Answer: C-The break-even point is reached when total cost just equals total revenue.

Explanation: The Break even charts usually is a graphical representation of the costs of a product and the total revenue of a product. At the point where revenue equals cost is the point of break even.

It shows an organisation at what point they will make a profit or loss. Any point below the break even point is a loss while any point above the break even point is a profit.

The break even charts aids the forecasting of costs and profits at different level of sales and production.