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the amount of income or loss at each level of sales can be derived from the...

the amount of income or loss at each level of sales can be derived from the total sales and total cost lines in a CVP graph

True or False

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Answer #1

The amount of income or loss at each level of sales can be derived from the total sales and total cost lines in a CVP graph.

The given statement is true.

With the help of total sales and total cost lines, income or loss at each level of sales can be derived. The difference between sales and total cost lines indicates the amount of profit earned or loss suffered.

The sales range up to which total cost line lies above the total sales line, there is a loss. After break even level (the point at which total cost and total sales line intersect), the difference between total sales line and total cost line indicates profit.

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