Discussion :: Industrial Engineering and Prod'n Mgmt
- In break even analysis, total cost consists of
|
A.
Fixed cost + sales revenue |
|
B.
Variable cost + sales revenue |
|
C.
Fixed cost + variable cost |
|
D.
Fixed cost + variable cost + profit |
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Answer : Option C
Explanation :
The break-even point (BEP) or break-even level represents the sales amount—in either unit (quantity) or revenue (sales) terms—that is required to cover total costs, consisting of both fixed and variable costs to the company.
Total profit at the break-even point is zero.
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