A cost-volume-profit graph has a line for ________ and a line for ________.
A) revenues; variable costs only
B) revenues; fixed costs only
C) revenues; total costs
D) net profit; net loss

Question

Quizplus · Accepted Answer

A cost-volume-profit graph has a line for revenues and a line for total costs. This graph shows the relationship between the level of sales activity and resulting profits or losses. The revenue line represents the sales revenue generated from the level of activity, while the total cost line represents all costs incurred at that level of activity, including both fixed and variable costs. As the activity level increases or decreases, the lines on the graph move accordingly, showing how changes in sales volume impact profits or losses.

A Cost-Volume-Profit Graph Has a Line for ________ and a Line