When calculating the breakeven point, which operating income amount is typically used?

The operating income amount typically used when calculating the breakeven point is $0. The breakeven point represents the level of sales at which a company's total revenues equal its total costs, resulting in no profit or loss. Therefore, at the breakeven point, the operating income is zero.

When analyzing various scenarios in cost-volume-profit (CVP) analysis, the goal is to determine how many units must be sold or what sales revenue needs to be achieved to cover all fixed and variable costs. Since breakeven signifies a neutral outcome where income is neither gained nor lost, $0 is the logical benchmark for operating income in this calculation.

Other amounts like Target Profit in Sales Dollars or sales volume reflect differing financial objectives beyond simply achieving breakeven and are used in other profit planning contexts, such as when setting specific sales goals or forecasting profits. Target sales in units may be relevant for calculating a breakeven point in terms of units sold, but in terms of operating income itself, the focus is strictly on reaching the point where income equals zero.