In break-even analysis, in order to make a profit the company must
A) sell above the break-even point
B) sell below the break-even point
C) sell at a loss
D) sell at the break-even point
E) sell on consignment

Question

Quizplus · Accepted Answer

In break-even analysis, the break-even point is where the revenue from sales equals the total costs. To make a profit, the company needs to sell above the break-even point, as this will generate revenue that is greater than the total costs, resulting in a profit. Selling below the break-even point will result in a loss, and selling at the break-even point will only cover costs without generating a profit. Therefore, selling above the break-even point is the best option.

In Break-Even Analysis, in Order to Make a Profit the Company