The cost-volume-profit graph

Question

Quizplus · Accepted Answer

The cost-volume-profit graph plots the total revenue line and the total cost line to show the relationship between the number of units sold, revenue generated, and the costs involved in producing those units. The vertical axis is usually measured in dollars, while the horizontal axis is measured in the number of units sold or the level of activity. Therefore, option B is correct. Option A is incorrect because the graph plots only two lines - one for total revenue and one for total cost. Option C is incorrect because the vertical axis is measured in dollars, not units sold. Option D is incorrect because only option B is correct.

The Cost-Volume-Profit Graph