Exhibit 21-7 Use the Cost-Volume-Profit Graph Below to Answer the Following

question 145

Multiple Choice

Exhibit 21-7 Use the cost-volume-profit graph below to answer the following question(s) .

-Refer to Exhibit 21-7. On the cost-volume-profit graph, the area between point G, the origin of the graph, and the point at which Line B crosses the sales axis represents the:

• A) Profit area
• B) Total costs
• C) Loss area
• D) Fixed costs

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Definitions:

FASB

stands for the Financial Accounting Standards Board, which is responsible for establishing accounting and financial reporting standards in the United States.

Total Liabilities

The combined debts and obligations that a company owes to outside parties at any given time.

Total Assets

The sum of all assets, both current and noncurrent, owned by an entity, reflecting the total resources at its disposal.

Stockholders' Equity

The portion of the balance sheet that represents the equity or ownership interest of shareholders in a company.