Asked by
Prabhjot Sandhu
on Dec 09, 2024Verified
The quantity sold at the accounting break-even point is equal to the total fixed costs plus depreciation divided by the contribution margin.
Contribution Margin
The difference between sales revenue and variable costs, illustrating how much revenue contributes towards covering fixed costs and generating profit.
Accounting Break-Even
Represents the sales amount at which a business covers its operating costs without making a profit or a loss.
Depreciation
The systematic allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value over time.
- Recognize the divergences between accounting and financial thresholds for break-even analysis.
Verified Answer
CD
Learning Objectives
- Recognize the divergences between accounting and financial thresholds for break-even analysis.