When graphing cost-volume-profit data on a CVP chart:
A) Units are plotted on the horizontal axis; costs on the vertical axis.
B) Units are plotted on the vertical axis; costs on the horizontal axis.
C) Both units and costs are plotted on the horizontal axis.
D) Both units and cost are plotted on the vertical axis.
E) Data points always represent expected future points.

Question

Quizplus · Accepted Answer

EA CVP chart typically plots units on the horizontal axis and costs on the vertical axis to analyze how costs and profits change with varying levels of production and sales. Additionally, the data points on a CVP chart often represent expected future points, as the purpose of the chart is to aid in forecasting and decision-making based on projections.

When Graphing Cost-Volume-Profit Data on a CVP Chart