Figure 13-7B -In the Break-Even Chart in Figure 13-7 Above, the Rectangular

question 5

Multiple Choice

Figure 13-7B
-In the break-even chart in Figure 13-7 above, the rectangular area EBCD represents the firm's

• A) fixed costs.
• B) break-even point.
• C) variable costs.
• D) profit.
• E) total revenue.

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Definitions:

Net Income

The net income of a company, which is calculated by deducting all costs and taxes from its total earnings.

Break-Even Point

The production level or sales volume at which total revenues equal total expenses, resulting in no net loss or gain.

Contribution Margin Ratio

A financial metric that represents the percentage of sale price that remains after variable costs are subtracted.

Sales Dollars

The total amount of money generated from the sale of goods or services before any expenses are subtracted.