High School

Which of these pairs of costs and revenues could a company have if it's at its break-even point?

A. Costs of [tex]$5000[/tex] and revenues of [tex]$6000[/tex]
B. Costs of [tex]$5000[/tex] and revenues of [tex]$7000[/tex]
C. Costs of [tex]$6000[/tex] and revenues of [tex]$7000[/tex]
D. Costs of [tex]$6000[/tex] and revenues of [tex]$6000[/tex]

Answer :

At the break-even point, a company's total costs equal its total revenues. This means we must have

[tex]$$
\text{Costs} = \text{Revenues}.
$$[/tex]

Now, let’s check each option:

1. Option A: Costs = \[tex]$5000 and Revenues = \$[/tex]6000. Here, \[tex]$5000 is not equal to \$[/tex]6000.
2. Option B: Costs = \[tex]$5000 and Revenues = \$[/tex]7000. Here, \[tex]$5000 is not equal to \$[/tex]7000.
3. Option C: Costs = \[tex]$6000 and Revenues = \$[/tex]7000. Here, \[tex]$6000 is not equal to \$[/tex]7000.
4. Option D: Costs = \[tex]$6000 and Revenues = \$[/tex]6000. In this option, \[tex]$6000 equals \$[/tex]6000, which satisfies the break-even condition.

Since only Option D has equal costs and revenues, it is the pair that represents a company at the break-even point.

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