Question

At the break-even point which of the following is not true?

	A.	Sales equal (variable expenses plus fixed expenses).
	B.	Variable expenses equal fixed expenses.
	C.	Profit equals zero.
	D.	Contribution margin equals fixed expenses.

Answer 1

Answer:

We Know that,

At Break Even Point, Profit will be Zero.

Since Profit Will be Zeo, Contribution Margin equal Fixed Expenses.

At Break Even Point, Since Profit will be Zero, All avariable Expenses plus Fixed Expenses Equals Sales.

At BEP, Variable Expenses doesn't equal Fixed Expenses

So, Only Wrong Statement is, Variable Expenses equal Fixed Expenses.

So the statement, Variable expenses equal fixed expenses is not True

Option (B) is Correct