Final answer:
The correct answer is 'D. profit chart,' which refers to a cost-volume-profit (CVP) chart in managerial accounting. It visually represents the relationships between a company's costs, revenues, and profits, aiding in business decisions.
Step-by-step explanation:
A cost-volume-profit (CVP) chart is a tool that is used in managerial accounting to analyze how changes in cost and volume affect a company's operating income and net income. In this context, the correct answer to what a CVP chart is also called is 'D. profit chart.' While other choices like even chart, low chart, and contribution chart are not standard terms associated with CVP analysis. Therefore, a CVP chart graphically represents the relationships between a company's costs, revenue, and profit.
Calculating the average profit (profit margin) involves dividing the profit by the quantity of output produced. When discussing costs, the average total cost is computed by dividing the total cost by the quantity of output. Average costs are typically U-shaped on a graph, and if a firm's average cost of production is lower than the market price, it indicates the firm is earning profits. It is important to note that if both total and average costs were plotted on the same axes, the average cost line would appear relatively flat compared to the other values.