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Unformatted text preview: the point representing total sales dollars at the activity level you have selected. A volume of 100 shoes has again been selected. Sales at that activity level total $3,000 (100 pair of shoes × $30 per pair of shoe). Draw a line through this point back to the origin. Problem The interpretation of the completed CVP graph is given below: Solution Completed CVP graph showing break even point The breakeven point is where the total revenue and total expense lines intersect. As discussed earlier, when sales are below the breakeven point the company suffers a loss. Note that the loss (represented by the vertical distance between the total expense and total revenue lines) gets bigger as sales decline. When sales are above the breakeven point, the company earns a profit and the size of the profit (represented by the vertical distance between the total revenue and total expense lines) increases as sales increase....
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 Spring '11
 Galvan
 Managerial Accounting, Binary relation, Euclidean geometry, cvp graph

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