Homework Answers
Answer
· Correct Answer = Option #1: The False statement is “The Break even point is where sales are equal to variable costs”.
· This is because if Sales = Variable
cost, the contribution margin will be $ 0.
Break even point will be = Fixed Cost / Contribution margin = $
Fixed cost / $ 0 = Infinity error.
· Break even point is where contribution margin is equal to fixed cost.
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If a company is operating at the break-even point: Multiple Choice its contribution margin will be equal to its variable expenses. its margin of safety will be equal to zero its fixed expenses will be equal to its variable expenses. its selling price will be equal to its variable expense per unit.
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