Which one of the following condition is CORRECT at the break-even point?

Explanation:

• A breakeven analysis is used to determine how much sales volume your business needs to start making a profit, based on your fixed costs, variable costs, and selling price.
• Break-even point usually means the business volume that balances total costs with total gains. At break-even volume, in other words, total cash inflows equal total cash outflows. At Break-Even, in other words, the net cash flow equals zero.
• At BEP: ​​Total cost = Sales revenue

Break-Even Point:

• It is the volume of production where total cost equal to total sale and an organisation neither earn profit nor suffer from loss
• It is also known as No Profit – No Loss point
   

\({\rm{Break\;Even\;Point}} = \frac{{{\rm{Total\;Fixed\;cost}}}}{{{\rm{Selling\;cost\;per\;unit}} - {\rm{Variable\;cost\;per\;unit}}}}\)

\({\rm{BEP}} = \frac{{\rm{F}}}{{{\rm{s}} - {\rm{v}}}}\)

• When sales revenue > total cost ⇒ There will be profit
• When sales revenue < total cost ⇒ There will be a loss