Question

On a CVP graph, the breakeven point is:

a. the area between the variable expense line and the fixed expense line
b. the intersection of the total revenue line and the fixed expense line
c. the intersection of the total revenue line and the total expense line
d. the area between the total revenue line and the total expense line

Answer 1

The breakeven point on a CVP graph represents the level of output where the total revenue line intersects the total expense line.

Step-by-step explanation:

The breakeven point on a CVP (Cost-Volume-Profit) graph represents the level of output where the total revenue line intersects the total expense line. At this point, the firm is neither making a profit nor incurring a loss. It is the point where the firm's revenue covers its total expenses.