Asked by Abhishek Prodduturi on May 07, 2024
Verified
In a Cost-Volume-Profit graph, the anticipated profit or loss at any given level of sales is measured by the vertical distance between the total revenue line (sales) and the total fixed expense line.
Cost-Volume-Profit Graph
A visual representation that shows the relationship between cost, volume of production, and profit, to analyze how changes in variables affect profits.
Total Revenue
The overall amount of money generated by a business from its activities, such as sales of goods or services, before any expenses are subtracted.
- Interpret the graphical representation of cost-volume-profit analysis.
Verified Answer
RJ
Rachael JulaineMay 08, 2024
Final Answer :
False
Explanation :
In a Cost-Volume-Profit (CVP) graph, the anticipated profit or loss at any given level of sales is measured by the vertical distance between the total revenue line and the total cost line, which includes both fixed and variable costs, not just the total fixed expense line.
Learning Objectives
- Interpret the graphical representation of cost-volume-profit analysis.
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