The Point Where the Profit Line Intersects the Horizontal Axis

question 24

Multiple Choice

The point where the profit line intersects the horizontal axis on the profit-volume graph represents:

• A) the maximum possible operating loss.
• B) the maximum possible operating income.
• C) the total fixed costs.
• D) the break-even point.

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Definitions:

Abbreviation

A shortened form of a word or phrase used for convenience, clarity, or brevity in written and spoken communication.

Gauge

An instrument or tool used to measure, test, or visually compare physical characteristics such as dimensions, thickness, or depth.

Spur Gears

Cylindrical gears with teeth projecting radially and having edges parallel to the axis, used to transmit motion between parallel shafts in machinery.

Pinion

A small gear that engages with a larger gear or rack, often used to convert rotational motion to linear motion or vice versa.