Question

On a​ break-even chart, the​ break-even volume is located​ __________. A. at the intersection of total revenue and target profit B. at the intersection of total revenue and variable costs C. at the intersection of total revenue and total costs D. at the intersection of total revenue and fixed costs E. at the intersection of target profit and total costs

Answer 1

Answer:

The correct answer is option B.

Explanation:

Break-even refers to the situation where there is no profit or loss. The total revenue earned at this point is equal to the total cost incurred. So the break-even volume will be located at the point where the total revenue will be equal to the total cost. The firm will not be having any profit or loss. At this point, the firm remains confused if it wants to operate or not.