Use the following information for the next 4 questions.
SXF Corporation sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows:

-Area C is best described as
A) Fixed cost
B) Margin of safety
C) Estimated profit at actual volume
D) Breakeven point

Question

Use the following information for the next 4 questions.
SXF Corporation sells its single product for $14 per unit, and its variable cost per unit is $4. Total fixed costs are $800. Its CVP graph is as follows:
 
-Area C is best described as
A) Fixed cost 
B) Margin of safety 
C) Estimated profit at actual volume 
D) Breakeven point

Quizplus · Accepted Answer

Area C represents the estimated profit at actual volume, which is the difference between total revenue and total costs at the actual level of sales.

Use the Following Information for the Next 4 Questions