Final answer:
The calculation of the break-even point is false since it requires the consideration of both total revenue and total costs, and not merely the sum of all expenses from the income statement.
Step-by-step explanation:
The statement that the break-even point can be determined by simply adding together all of the expenses from the income statement is false. The break-even point occurs when total revenue equals total costs, meaning that profit is zero.
To find this point, one must consider both total costs (which include variable and fixed costs) and total revenue, which is a function of the demand for the firm's products. While operating at the break-even point, a firm covers all its expenses but does not make a profit. If a firm's price is below average cost, it operates at a loss and must decide whether to continue producing or to shut down to minimize losses.