A cost-volume-profit graph shows the amount of net income or loss at each level of sales.

Question

Quizplus · Accepted Answer

A cost-volume-profit graph plots the relationship between sales volume and various costs, including fixed costs and variable costs, to determine how changes in sales volume affect net income or loss. The graph will show the break-even point, which is the sales volume where total costs equal total revenue, and any level of sales above this point will result in a net income, while any level of sales below it will lead to a net loss. Therefore, the graph does show the amount of net income or loss at each level of sales.

A Cost-Volume-Profit Graph Shows the Amount of Net Income or Loss