An accounting break-even point of 2,000 means the firm Blank______.

Question

Multiple choice question.

will start generating losses if it sells more than 2,000 units

will start generating profits if it sells more than 2,000 units

will start generating profits if its total revenue reaches $2,000

has total costs (including depreciation) of $2,000

Answer 1

The correct answer is:

will start generating profits if it sells more than 2,000 units.

The accounting break-even point is the level of sales at which total revenues equal total costs, and any sales beyond this point contribute to profit.