Question

Breakeven point (BEP) indicates

• A. Recovery of fixed cost
• B. Recovery of variable cost
• C. Recovery of both of above costs
• D. Recovery of fixed, variable costs and margin of profit

Answer 1

Answer:

C. Recovery of both of above costs

Breakeven point (BEP) is the minimum level of production required to start making a profit. It is determined by evaluating fixed cost (F), variable cost (V), and sales revenue (S). BEP is the point where total cost and sales revenue lines intersect. The equation for BEP is BEP = F / (S - V). which indicates the recovery of both fixed and variable costs