Interpreting break-even charts:

• The break-even point on a chart is where total costs equal total revenue.

  True
• Fixed costs are costs that do not change with output
• Fixed costs include expenses such as rent, insurance, and administrative expenses
• What is the income generated from sales called?

  Total revenue
• Fixed costs are depicted as a horizontal line on the break-even chart
• What type of costs change with output levels?

  Variable costs
• Match the component with its usage in a break-even chart:

  Fixed Costs ↔️ Depicted as a horizontal line

  Variable Costs ↔️ Contribute to the slope of the total cost line

  Total Revenue ↔️ Depicted as a line rising from zero

  Break-Even Point ↔️ Identified by the intersection of total cost and revenue lines
• The break-even point is the level of sales needed to make a profit.

  False
• What does a break-even chart help determine?

  Break-even point
• Where is the break-even point located on a break-even chart?

  Intersection of cost and revenue lines
• Variable costs vary directly with the level of output
• Using a break-even chart allows businesses to assess the production levels needed to reach profitability
• Variable costs change with the level of output.

  True
• What does sales above the break-even point indicate?

  Profit
• Fixed costs are depicted on a break-even chart as a horizontal line
• What is the minimum level of sales needed to cover all costs and make no profit or loss?

  Break-even point
• The break-even point occurs where the total revenue line intersects the total cost line.
• The break-even point is where total revenue equals total costs.
• On a break-even chart, cost lines show total expenses, including fixed and variable costs.
• Fixed costs are depicted as a horizontal line on a break-even chart.


  True
• Variable costs contribute to the slope of the total cost line.

  True
• How is total revenue depicted on a break-even chart?

  Line rising from zero
• Match the component of a break-even chart with its usage:

  Fixed Costs ↔️ Depicted as a horizontal line

  Variable Costs ↔️ Contribute to the slope of the total cost line

  Total Revenue ↔️ Depicted as a line rising from zero

  Break-Even Point ↔️ Identified by the intersection of total cost and revenue lines
• Steps to locate the break-even point on a break-even chart

  1️⃣ Find the intersection where the total revenue line meets the total cost line

  2️⃣ Read the quantity and cost at this point from the x and y axes
• At the break-even point, a business is neither making a profit nor a loss.


  True
• The slope of the cost line is determined by the variable cost per unit.

  True
• An increase in fixed costs shifts the break-even point upward.


  True
• A break-even chart is a visual tool that shows the relationship between a company's costs and revenue
• What does a break-even chart illustrate?

  Costs and revenue relationship
• Where is the break-even point located on the chart?

  Total revenue equals total costs
• The break-even point results in no profit or loss for the business.


  True
• Where does the total cost line intersect the total revenue line on a break-even chart?

  Break-even point
• Costs that do not change with output are called fixed costs.
• How are fixed costs depicted on a break-even chart?

  Horizontal line
• Steps to locate the break-even point on a chart:

  1️⃣ Identify the intersection of the total revenue and total cost lines

  2️⃣ Read the quantity and cost values from the x and y axes
• Match the term with its description:

  Revenue Lines ↔️ Income from sales

  Cost Lines ↔️ Total expenses

  Break-Even Point ↔️ Intersection of revenue and cost lines
• A break-even chart shows the relationship between costs, revenue, and the break-even point.
• What are fixed costs and how are they depicted on a break-even chart?

  Costs that do not change; horizontal line
• The break-even point is where total revenue equals total costs, indicating no profit or loss.


  True
• Understanding the components of a break-even chart helps businesses make informed decisions about pricing, production, and profitability.


  True