Consider the following cost-volume-profit graph: The line designated by the letter (A)represents which of the following?
A) Total revenue
B) Total cost
C) Total fixed cost
D) None of these is correct.

Question

Consider the following cost-volume-profit graph:  The line designated by the letter (A)represents which of the following?
A) Total revenue 
B) Total cost 
C) Total fixed cost 
D) None of these is correct.

Quizplus · Accepted Answer

The line designated by letter (A) on the graph represents the Total Revenue. This is because revenue is calculated by multiplying the number of units sold (x-axis) by the selling price per unit (y-axis). Therefore, the slope of the line represents the selling price per unit and the y-intercept represents the total revenue when no units are sold. As the number of units sold increases, the total revenue also increases proportionally.

Consider the Following Cost-Volume-Profit Graph: the Line Designated by the Letter