Where is the break-even point on a cost-volume-profit graph?
A) at the intersection of the revenue line and the profit line
B) at the intersection of the revenue line and the total cost line
C) at the intersection of the fixed cost line and the variable cost line
D) at the intersection of the contribution margin line and the fixed cost line

Question

Quizplus · Accepted Answer

The break-even point on a cost-volume-profit graph is the point where the revenue line intersects with the total cost line. This is the point where the company's sales revenue equals its total expenses, and it is not yet making a profit or incurring a loss. This point is important because it indicates the minimum level of sales a company needs to cover its costs and start making a profit. Therefore, the correct answer is B.

Where Is the Break-Even Point on a Cost-Volume-Profit Graph