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Unformatted text preview: profit is being made with each sale that can go towards fixed cost and contribute to net income. It can give an analysis if the company is gaining profit or losing profit. It gives the business an idea of what their goals would be in the sale process. To determine the amount that needs to be sold to cover any costs. Question 14: The crossing of the total cost line and the total revenue line will show the break-even point on the CVP graph. Then at the point of the break-even, a horizontal line should be drawn to the level of activity line, and a vertical line at the break-even point should be drawn to the vertical axis. Break-even points are determined by the lines that were drawn from the plotted point to the horizontal axis and vertical axis. The level of activity will be on the horizontal axis and the dollar sales will be on the vertical axis....
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This note was uploaded on 03/27/2012 for the course BUSINESS acc220 taught by Professor ? during the Spring '12 term at University of Phoenix.
- Spring '12