From the graph, how many units must be sold each month to realize a profit?

Rationale

To realize a profit, 225 units must be sold each month.

The graph indicates that breakeven occurs at the sales level of 225 units, where total revenue equals total costs. Selling fewer than this amount results in losses, while selling more leads to profit.

A (100) YOUR ANSWER

Selling 100 units is below the breakeven point of 225 units, leading to a loss since total costs would exceed total revenue at this level of sales. Thus, this choice does not allow for profit realization.

B (225) CORRECT

This choice represents the exact breakeven point, where total sales revenue equals total costs. Selling 225 units neither results in profit nor loss, but it is the minimum amount needed to start generating profit with any additional units sold beyond this threshold.

C (250) YOUR ANSWER

Selling 250 units exceeds the breakeven point of 225 units, resulting in profit. However, while this choice is viable for profit, it is not the minimum required to start realizing a profit, thus making it incorrect for the question.

D (275) YOUR ANSWER

Similar to option C, selling 275 units also exceeds the breakeven point and generates profit. However, it is not the minimum sales figure necessary to reach profitability, rendering this choice incorrect in the context of the question.

Conclusion

The analysis reveals that 225 units is the critical threshold for profitability, representing the breakeven point where costs and revenues align. Any sales below this number result in losses, while sales at this level maintain neutrality. Therefore, while options C and D lead to profit, they do not answer the question regarding the minimum unit sales needed to start realizing profit.

From the graph, how many units must be sold each month to realize a profit?

To realize a profit, 225 units must be sold each month.

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