Question

Assertion (A): Break-even point is no profit no loss point.

Reason (R): Break-even point is the point where total costs are exactly equal to total sales. As such, there is neither profit nor any loss at this point.

In the context of the above two statements, which of the following is correct?

Options

• (A) and (R) both are correct and (R) correctly explains (A).

• Both (A) and (R) are correct but (R) does not explain (A).

• Both (A) and (R) are incorrect.

• (A) is correct but (R) is incorrect.

Answer 1

(A) and (R) both are correct and (R) correctly explains (A).