Which of the following is correct? The break-even point occurs when: total contribution margin equals total fixed expenses. total NOI equals total expenses. total NOI equals total fixed expenses. total variable expenses equal total contribution margin.

total contribution margin equals total fixed expenses

Explanation:

The BEP which is the break even point is the point where the company's sales or revenue generated is equal to the cost incurred. As such, the BEP is the number of units that must be sold for the company to make neither a profit nor a loss.

Both sales and variable cost are dependent on the number of units sold.

The sales less the variable costs gives the contribution margin. The contribution margin less the fixed expense gives the net operating income (NOI).  When the NOI is zero, the point or number of units is called the breakeven point.

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