Which of the following statements about a cost-volume-profit graph is correct?
A) A cost-volume-profit graph is prepared with activity (number of units) on the vertical axis.
B) The intersection of the total sales line and the total cost line represents the break-even point.
C) The area above the break-even point represents the area of loss.
D) The total cost line intersects the vertical axis at the dollar amount of total variable costs.

Question

Quizplus · Accepted Answer

The break-even point is where total sales equal total costs, so the intersection of the total sales line and total cost line represents the break-even point.

Which of the Following Statements About a Cost-Volume-Profit Graph Is