{"id":208091,"date":"2025-04-26T07:36:15","date_gmt":"2025-04-26T07:36:15","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=208091"},"modified":"2025-04-26T07:36:17","modified_gmt":"2025-04-26T07:36:17","slug":"select-the-correct-statement-concerning-the-cost-volume-profit-graph-at-right","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/04\/26\/select-the-correct-statement-concerning-the-cost-volume-profit-graph-at-right\/","title":{"rendered":"Select the correct statement concerning the cost-volume-profit graph at right"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Select the correct statement concerning the cost-volume-profit graph at right:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">a. The point identified by &#8220;B&#8221; is the break-even point.<br>b. Line F is the variable cost line.<br>c. At point B, profits equal total costs.<br>d. Line E is the total cost line.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-6-color\"><strong>The correct answer and explanation is :<\/strong><\/mark><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The correct answer is: <strong>a. The point identified by &#8220;B&#8221; is the break-even point.<\/strong><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Explanation:<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A cost-volume-profit (CVP) graph visually shows the relationships among a company\u2019s revenues, costs, and profits at different levels of sales volume. The key elements typically plotted are <strong>total revenues<\/strong>, <strong>total costs<\/strong>, <strong>fixed costs<\/strong>, and <strong>variable costs<\/strong> against units sold.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In the CVP graph:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The <strong>break-even point<\/strong> is where <strong>total revenue equals total cost<\/strong>. At this point, the business makes <strong>zero profit<\/strong> \u2014 it covers all its costs but earns no profit. This critical point is usually marked clearly (often by a labeled point like &#8220;B&#8221;).<\/li>\n\n\n\n<li><strong>Line E<\/strong> (often drawn starting from the fixed costs on the y-axis and sloping upward) represents <strong>total costs<\/strong>, which include both <strong>fixed costs<\/strong> (which do not change with volume) and <strong>variable costs<\/strong> (which increase with volume).<\/li>\n\n\n\n<li><strong>Line F<\/strong> is not the variable cost line; typically, variable costs are embedded within the total cost line but are not graphed separately unless specifically indicated.<\/li>\n\n\n\n<li>At point B, <strong>revenues equal total costs<\/strong>, so there is <strong>no profit or loss<\/strong> \u2014 only the recovery of all costs. Profits are not equal to total costs (they are zero), but <strong>revenues are equal to total costs<\/strong>.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Understanding this graph helps businesses determine how many units they must sell to cover their costs and start earning a profit. It\u2019s a visual aid for decision-making related to pricing, cost control, and sales planning. Businesses aim to operate above the break-even point where total revenues exceed total costs, thereby generating profits.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In summary, point <strong>B<\/strong> marks the break-even \u2014 the pivotal spot where survival (covering all expenses) transitions into profit-making for the company.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n","protected":false},"excerpt":{"rendered":"<p>Select the correct statement concerning the cost-volume-profit graph at right: a. The point identified by &#8220;B&#8221; is the break-even point.b. Line F is the variable cost line.c. At point B, profits equal total costs.d. Line E is the total cost line. The correct answer and explanation is : The correct answer is: a. The point [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-208091","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/208091","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=208091"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/208091\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=208091"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=208091"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=208091"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}