Asked by Stone Jamison on Jun 07, 2024
Verified
Briefly describe a CVP chart, including its major components.
Major Components
Essential parts or elements that constitute the larger system or whole.
- Apply CVP analysis in various business decision scenarios, including multi-product companies.
Verified Answer
WS
Weston StilesJun 13, 2024
Final Answer :
The vertical axis of a CVP chart plots total dollars of costs and sales. The horizontal axis plots the volume of activity. Specifically, fixed cost is represented as a point on the vertical axis and the total cost line is plotted from the fixed cost point rising upward at a slope equal to the unit variable cost. Sales are plotted from zero at a slope equal to the unit sales price. Break-even is where the total cost line intersects the sales line.
Learning Objectives
- Apply CVP analysis in various business decision scenarios, including multi-product companies.
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