In the cost-volume- profit graph (above), what is represented by the point marked "A"? Question 1 options: Breakeven point Fixed expenses Operating income area Operating loss area The image displays a "Cost-Volume-Profit Graph," illustrating the relationship between cost, sales, and the volume of units sold. Here's a detailed explanation of the graph:### Axes- **Horizontal Axis (X-axis):** Represents the "Volume of units," ranging from 0 to 500.- **Vertical Axis (Y-axis):** Represents the monetary value in dollars, up to $1,100.### Lines- **Cost Line (Blue):** Starts at point B on the vertical axis and increases linearly as the volume of units increases. This line represents the total cost incurred at different production levels.- **Sales Line (Pink):** Starts at the origin (0,0) and increases linearly, crossing the cost line at point A. This line represents the total sales revenue generated at different sales volumes.### Points of Interest- **Intersection Point (A):** The point where the cost and sales lines intersect. This indicates the break-even point where total costs equal total sales, meaning there is no profit or loss.- **Segment BD:** Represents the loss area, where costs exceed sales.- **Segment AC:** Represents the profit area, where sales exceed costs.### Shaded Area- The entire region between the cost and sales lines is shaded, highlighting the areas of profit and loss as described above.### Legend- The legend on the right provides clarification: - **Blue Line:** Cost - **Pink Line:** SalesThis graph is a valuable tool in financial analysis, showcasing how changes in production volume affect profits and costs. It helps businesses determine the break-even point and forecast profitability based on unit sales.

Introduction Cost volume profit (CVP) In CVP analysis if cost is equal to the sales then there is…

Answered: In the cost-volume- profit graph…

In the cost-volume- profit graph (above), what is represented by the point marked "A"? Question 1 options: Breakeven point

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A. Mastery Problem: Break-Even Point in Units and the Profit-Volume Graph CVP and the Contribution Margin Income Statement For planning and control purposes, managers have a powerful tool known as cost-volume-profit (CVP) analysis. CVP shows how revenues, expenses, and profits behave as volume changes. In CVP analysis, costs are classified according to behavior: variable or fixed. To arrive at operating income in CVP analysis, costs are classified by behavior on the income statement. This format is known as the contribution margin income statement. Complete the following table to illustrate the format. Select a or b to pick the correct decscription under the sales column Contribution Margin Income Statement Sales $ XXX (a. Less: Variable Cost or b. Less: Fixed costs) (XXX) (a. Contribution margin or b. Gross margin) $ XXX (a. Less: Variable Cost or b. Less: Fixed costs) (XXX) Operating income $ XXX B. CVP and the Break-Even Point Review the following concepts about…
Question: In marginal accounting, what is the primary focus when analyzing costs and revenues? A) Total accumulated costs and revenues B) Average costs and revenues C) Incremental changes in costs and revenues D) Fixed costs and variable costs
The equation for total costs (Y) is: Y = a+ bX In this equation, “a” represents: Net income Cost of goods sold Total fixed costs The level of activity (e.g., the number of units produced) Total variable costs Variable cost per unit of X Total revenue
1. Now change all of the dollar amounts in the data area of your worksheet so that it looks like this: 1 2 3 Data 4 Sales Variable costs: 5 67 00 8 A Chapter 1: Applying Excel 9 10 11 Cost of goods sold Variable selling Variable administrative Fixed costs: Fixed selling Fixed administrative $ $ $ $ $ $ B 32,000 16,000 1,600 1,400 2,500 1,500
Contribution margin is Oa. profit Ob. the excess of sales over variable costs Oc. Oc. another term for volume in the "cost-volume-profit" analysis Od. the same as sales revenue