'Break Even Point' is defined as :

Correct option is C

The correct answer is (c) Situation when firm has neither profit nor loss.

The Break-Even Point (BEP) is the level of output or sales at which a firm’s total revenue is exactly equal to its total costs (both fixed and variable costs). At this point:

• The firm neither makes a profit nor incurs a loss.

• The contribution margin (sales revenue minus variable costs) covers the fixed costs exactly.

Key Characteristics:

• Profitability Beyond BEP: If sales exceed the BEP, the firm starts generating profits.

• Loss Below BEP: If sales fall short of the BEP, the firm incurs a loss.

Additional Information:

• Profit Situation: Happens when revenue > total costs.

• Loss Situation: Happens when revenue < total costs.