Certified in Logistics, Transportation and Distribution (CLTD) Practice Test 2025 – Your All-in-One Resource to Complete Exam Success!

The break-even point is a crucial calculation in business and finance that determines the quantity of goods or services a company must sell to cover its costs. This point occurs where total revenue equals total costs, meaning the business is not making a profit but is also not losing money.

The correct choice outlines the formula needed to calculate the break-even point in terms of quantity (Q). The equation includes fixed costs and variable costs, which are essential components of understanding overall costs.

In this formula, fixed costs represent the costs that do not change with the level of production (e.g., rent, salaries), while variable costs per unit represent costs that vary directly with the level of production (e.g., materials, labor). By setting the equation of total costs equal to revenues derived from selling Q units, it provides a clear path to isolate Q, ultimately revealing the quantity needed to break even.

The other choices do not accurately relate to calculating the break-even point for quantity. For example, one choice discusses current liabilities and current assets, which pertain more to a company's financial position rather than break-even calculations. Another involves inventory valuation, which does not factor into the straightforward calculation of the break-even quantity. The first choice references total revenue and total cost but does not