Asked by Stacie Batchelor on Apr 27, 2024
Verified
In break-even analysis, the contribution margin is the break-even point expressed in units.
Contribution Margin
Contribution margin is the amount by which a product's sales revenue exceeds its variable costs, indicating the contribution of sales towards fixed costs and profits.
Break-even Point
The financial point at which total revenue equals total costs, resulting in zero net profit or loss.
- Gain insight into the fundamentals and practical aspects of break-even analysis in entrepreneurial activities.
Verified Answer
FG
Fernanda GarciaMay 02, 2024
Final Answer :
False
Explanation :
The contribution margin is not the break-even point expressed in units. The contribution margin is the amount of revenue remaining after all variable costs have been deducted. The break-even point expressed in units is the number of units that must be sold in order to cover all fixed and variable costs without making a profit or loss.
Learning Objectives
- Gain insight into the fundamentals and practical aspects of break-even analysis in entrepreneurial activities.
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