Figure 13-7

-The break-even chart for a picture frame store in Figure 13-7 above shows that by selling 800 pictures,the store will
A)break even.
B)earn a profit.
C)incur a loss.
D)have no fixed costs.
E)have no variable costs.

Question

Figure 13-7
 
-The break-even chart for a picture frame store in Figure 13-7 above shows that by selling 800 pictures,the store will
A)break even. 
B)earn a profit. 
C)incur a loss. 
D)have no fixed costs. 
E)have no variable costs.

Quizplus · Accepted Answer

At a quantity of 800 pictures,the firm will earn a profit because the 800 units sold will generate a sales level that resides in the area GAF-a sales level that exceeds 400 units,the break-even point beyond which the picture frame store will earn a profit.

Figure 13-7 -The Break-Even Chart for a Picture Frame Store in Figure