Graphical Location of Break-Even Point
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Question (English)
The break-even point is obtained at the intersection of:
- Total revenue and Total cost line ✓ Correct
- Total cost and variable cost line
- Variable cost and fixed cost line
- Fixed cost and total cost line
Explanation:
Correct Answer: Total revenue and Total cost line
On a break-even chart, the break-even point is found at the intersection of the Total Revenue line and the Total Cost line.
Break-Even Chart Elements
- X-axis: Units of output (production/sales quantity)
- Y-axis: Cost/Revenue (in ₹)
- Fixed Cost line: Horizontal line — doesn't change with output (e.g., rent, insurance)
- Total Cost line: Starts at fixed cost and rises with output (Fixed cost + Variable cost)
- Total Revenue line: Starts from origin (zero) and rises with output at the selling price rate
- Break-even point: Where Total Revenue = Total Cost (intersection of TR and TC lines)
- Area to the left of break-even point = Loss area
- Area to the right of break-even point = Profit area
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This multiple choice question is from Animal Refresher, Veterinary Extension Education. It has 4 options with a detailed explanation of the correct answer. Practice more MCQs from Animal Refresher to strengthen your preparation.
