What is the formula for computing the break-even point? A) break-even

QUESTION

What is the formula for computing the break-even point?

A) break-even point = fixed cost / (variable cost of 1 unit – price of 1 unit)
B) break-even point = fixed cost / (price of 1 unit – variable cost of 1 unit)
C) break-even point = fixed cost / (price of 1 unit + variable cost of 1 unit)
D) break-even point = price of 1 unit / (variable cost of 1 unit – fixed cost)
E) break-even point = variable cost of 1 unit / (fixed cost – price of 1 unit)

ANSWER

Answer: B
Explanation: B) The break-even point is the price at which revenue equals the cost of producing the product.