Use the following information to answer the following Questions

-Refer to the figure above. Assume that the company whose cost structure is depicted in the figure expects to produce a loss for the upcoming period. The loss would be shown on the graph:
A) by the area immediately above the break-even point.
B) by the area immediately below the total cost line.
C) by the area diagonally to the right of the break-even point.
D) by the area diagonally to the left of the break-even point.
E) none of the answers is correct.

Question

Use the following information to answer the following Questions

-Refer to the figure above. Assume that the company whose cost structure is depicted in the figure expects to produce a loss for the upcoming period. The loss would be shown on the graph:
A) by the area immediately above the break-even point. 
B) by the area immediately below the total cost line. 
C) by the area diagonally to the right of the break-even point. 
D) by the area diagonally to the left of the break-even point. 
E) none of the answers is correct.

Quizplus · Accepted Answer

The loss for a company is represented on a cost-volume-profit (CVP) graph as the area where the total cost line is above the total revenue line, which occurs to the left of the break-even point. This is because, in this region, the company's costs exceed its revenues, leading to a loss.

Use the Following Information to Answer the Following Questions