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On a CVP Graph, the Intersection of the Sales Line

question 62

Multiple Choice

On a CVP graph, the intersection of the sales line and the total cost line is known as the: On a CVP graph, the intersection of the sales line and the total cost line is known as the:   A)  total cost point. B)  breakeven point. C)  unit contribution margin. D)  margin of safety point.

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Definitions:

Capital Lease

A lease classified as a purchase by the lessee for accounting purposes, where the lessee essentially buys the leased asset.

Incremental Borrowing Rate

The interest rate a lessee would have to pay to borrow on a collateralized basis over a similar term the funds necessary to lease an asset.

Lessor's Implicit Interest Rate

The interest rate in a lease agreement that, when applied to the minimum lease payments, causes the present value of those payments to equal the fair value of the leased asset.

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