If sales volume exceeds the break-even point, the firm will experience
A)an operating loss.
B)an operating profit.
C)an increase in plant and equipment.
D)an increase in stock price.

Question

Quizplus · Accepted Answer

If sales volume exceeds the break-even point, it means the revenue generated is higher than the total costs incurred including fixed and variable costs. This leads to an operating profit for the firm. Therefore, option B is the correct choice. The other options (A, C, D) are not applicable as they do not represent the outcome of exceeding the break-even point.

If Sales Volume Exceeds the Break-Even Point, the Firm Will