The point where the profit line intersects the horizontal axis on the profit-volume graph represents:
A) the maximum possible operating loss.
B) the maximum possible operating income.
C) the total fixed costs.
D) the break-even point.

Question

Quizplus · Accepted Answer

The point where the profit line intersects the horizontal axis on the profit-volume graph represents the break-even point, which is the point at which the company neither earns a profit nor incurs any loss. It is the point where the total revenue is equal to the total cost, including fixed costs and variable costs. Hence, the correct choice is D.

The Point Where the Profit Line Intersects the Horizontal Axis