Which of the Following Statements Is Correct with Regard to a Cost-Volume-Profit

Multiple Choice

Which of the following statements is correct with regard to a Cost-Volume-Profit graph?

A) A Cost-Volume-Profit graph shows the maximum possible profit.
B) A Cost-Volume-Profit graph shows the break-even point as the intersection of the total sales revenue line and the total expense line.
C) A Cost-Volume-Profit graph assumes that total expense varies in direct proportion to unit sales.
D) A Cost-Volume-Profit graph shows the operating leverage as the gap between total sales revenue and total expense at the actual level of sales.