How can a profit-volume graph be distinguished from a cost-volume-profits graph?
A) Revenues are expected at targeted sales levels.
B) Costs are graphed on the y-axis against sales volume.
C) Operating income is graphed on the y-axis against sales volume.
D) Revenues and costs are graphed on the y-axis against sales volume.

Question

Quizplus · Accepted Answer

A profit-volume graph only shows the relationship between sales volume and operating income, while a cost-volume-profits graph graphs both revenues and costs on the y-axis against sales volume. Therefore, Option C is the correct answer.

How Can a Profit-Volume Graph Be Distinguished from a Cost-Volume-Profits