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SSC Financial and Cost Accounting P-1 QUESTION #6069
Question 1

In a standard break-even chart, what does the vertical distance between the total revenue line and the total cost line represent at a level of activity beyond the break-even point?

  • The break-even revenue
  • The margin of safety in revenue
  • The profit at that level of activity✔️
  • The total contribution
Correct Answer Explanation

In a break-even chart, the gap between Total Revenue and Total Cost represents Profit (if revenue is higher) or Loss (if cost is higher).