What is the term for the point on a break-even chart where total costs equal total revenue?

• A. Break-even quantity
• B. Margin of safety
• C. Break-even point
• D. Profit

Answer: (C)

In break-even analysis, the point where total costs equal total revenue means profit is zero. The two lines on the chart intersect at this level, showing the exact output and revenue where costs are fully covered. This intersection is called the break-even point. It tells you the minimum sales needed to avoid a loss. The break-even quantity is the specific number of units at which you reach that point, margin of safety shows how much current sales could fall before hitting break-even, and profit is revenue minus costs, which would be zero at break-even.