The Following Diagram Is a Cost-Volume-Profit Graph for a Manufacturing

question 78

Multiple Choice

The following diagram is a cost-volume-profit graph for a manufacturing company:

-Refer to the figure.Which of the following statements best describes the labelled item on the diagram?

• A)Area CDE represents the area of net loss.
• B)Line AC graphs the total fixed costs.
• C)Point D is where contribution margin increases.
• D)Line AC graphs the total costs.

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Definitions:

Idle Time

Periods when resources are available but not in use, often due to delays, inefficiencies, or lack of demand, leading to wasted capacity.

Observations

The process of monitoring, recording, and analyzing data or events for the purpose of drawing conclusions or making decisions.

Predetermined Time Standard

A method used in industrial engineering and time management to estimate the time required for completing a task based on standard time units.

TMU

Time Measurement Unit, a standard unit used in time study and work measurement for setting standard times for tasks.