Which statement describes a characteristic of the cost-volume-profit graph?
A) It is difficult to interpret.
B) It plots three separate lines.
C) It plots the total revenue line and the total cost line.
D) The vertical axis is measured in units sold, and the horizontal axis is measured in dollars.

Question

Quizplus · Accepted Answer

The cost-volume-profit graph plots the total revenue and total cost lines, making it easier to determine the break-even point and the level of profit at different levels of sales. The vertical axis is measured in dollars, while the horizontal axis is measured in units sold or sales volume. Option A is incorrect because the graph is designed to be easy to interpret. Option B is also incorrect because it only plots two lines, not three. Option D is incorrect because the vertical axis is measured in dollars, not units sold.

Which Statement Describes a Characteristic of the Cost-Volume-Profit Graph