A CVP analysis indicates that the breakeven point for Park Lane Ltd is 2,000 units. If the company sells 1,900 units, then it will make a loss.

Question

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Since the breakeven point is where total costs equal total revenue, selling fewer units than the breakeven point (2,000 units) means the company's total revenue will be less than its total costs, resulting in a loss.

A CVP Analysis Indicates That the Breakeven Point for Park