Question 67

225 units must be sold each month to realize a profit.

To achieve profitability, it is necessary to sell 225 units each month, as indicated by the graph, which shows the break-even point at this level of sales.

A) 100

Selling 100 units per month would likely result in a loss, as this number is below the break-even point illustrated in the graph. The revenue generated from 100 units would not cover the fixed and variable costs associated with production.

B) 225

This option is correct as it represents the exact number of units needed to reach the break-even point, where total revenue equals total costs. At this sales volume, the business starts to realize a profit.

C) 250

While selling 250 units would indeed generate profit, it exceeds the minimum required sales for profitability. Therefore, this option is unnecessary for realizing a profit, making it incorrect in the context of the question.

D) 275

Similar to option C, selling 275 units would also lead to profit, but it is not the minimum required amount. Thus, it does not accurately answer the question regarding the necessary units to be sold for profit realization.

Conclusion

The correct answer is 225 units, as it is the precise threshold at which costs and revenues balance, leading to profit. Other options either fall short of this threshold or exceed it, failing to address the question of the minimum sales required for profitability.