High School

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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]$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 :

To determine if a company is at its break-even point, we use the definition that at break-even,

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

Let's analyze each pair:

1. For costs of \[tex]$5000 and revenues of \$[/tex]6000, we have:
[tex]$$5000 \neq 6000.$$[/tex]
2. For costs of \[tex]$5000 and revenues of \$[/tex]7000, we have:
[tex]$$5000 \neq 7000.$$[/tex]
3. For costs of \[tex]$6000 and revenues of \$[/tex]7000, we have:
[tex]$$6000 \neq 7000.$$[/tex]
4. For costs of \[tex]$6000 and revenues of \$[/tex]6000, we have:
[tex]$$6000 = 6000.$$[/tex]

Since only when the costs equal the revenues is the company at the break-even point, the correct pair is:

[tex]$$\textbf{Costs = \$6000 and Revenues = \$6000.}$$[/tex]

Thus, the correct answer is option D.

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