Final answer:
The horizontal axis on a CVP graph represents sales volume, used for plotting the number of units sold against revenues and costs, whereas the vertical axis shows total revenues and costs, with fixed costs at the vertical intercept.
The correct option is A) sales volume.
Step-by-step explanation:
On a Cost-Volume-Profit (CVP) graph, the horizontal axis is used to record sales volume. This involves plotting the number of units sold or produced against potential revenue and costs. The CVP graph visualizes the relationships between cost, volume, and profit, showcasing how changes in selling prices, costs, and volume affect a company's profit. The vertical axis, on the other hand, typically represents total revenues and total costs. Fixed costs are shown as the vertical intercept of the total cost curve, indicating that they are the costs incurred when the output is zero, hence there are no variable costs. As output increases, the total cost line slopes upwards, reflecting the addition of variable costs to fixed costs.
The correct option is A) sales volume.