In Step 2 of breakeven analysis,plot the ______ on the vertical axis and the ______ on the horizontal axis.
A)fixed costs,variable costs
B)total costs,annual production volume
C)annual production volume,variable costs
D)variable costs,fixed costs

Question

Quizplus · Accepted Answer

In Step 2 of breakeven analysis, we plot the total costs on the vertical axis and the annual production volume on the horizontal axis. This is because we want to find the point where total revenue equals total cost, so we need to understand how total costs change as we produce more or less units. The total costs include both fixed and variable costs, so it's important to capture both of these in the analysis. Therefore, the best choice is B) total costs, annual production volume.

In Step 2 of Breakeven Analysis,plot the ______ on the Vertical