Answer (D) is correct . A cost-volume-profit chart contains elements (lines, points, axes) that identify variable cost, fixed cost, the breakeven point, total revenue, profit, and volume in units. When the total sales revenue line rises above the total expense line, a company will have positive net income.
Answer (A) is incorrect because Net income cannot be determined by comparing the total variable expense and total fixed expense lines.
Answer (B) is incorrect because The company will incur a net loss when the total expense line exceeds the total sales revenue line.
Answer (C) is incorrect because Merely exceeding total fixed expenses does not necessarily result in positive operating income.
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