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

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

Answer :

At the break-even point, a company’s costs equal its revenues. This means that

[tex]$$\text{costs} = \text{revenues}$$[/tex]

Let’s analyze each option:

1. For Option A, the costs are \[tex]$6000 and the revenues are \$[/tex]6000. Since

[tex]$$6000 = 6000,$$[/tex]

the company breaks even.

2. In Option B, the costs are \[tex]$6000 and the revenues are \$[/tex]7000. Here, the revenues exceed the costs, so the company would be making a profit rather than breaking even.

3. In Option C, the costs are \[tex]$5000 and the revenues are \$[/tex]6000. Again, the revenues exceed the costs, meaning there would be a profit.

4. For Option D, the costs are \[tex]$5000 and the revenues are \$[/tex]7000. The difference is larger, so the company is making a profit.

Since break-even occurs when the costs equal the revenues, the only pair that meets this condition is Option A.

Thus, the correct answer is Option A: Costs of \[tex]$6000 and Revenues of \$[/tex]6000.

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