The Cost-Volume-Profit Graph Portrays the Relationship Between Profits and Sales

question 1

True/False

The cost-volume-profit graph portrays the relationship between profits and sales volume.

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Definitions:

Relevant Costs

Costs that should be considered when making business decisions because they will be affected by the decision.

Direct Material Costs

Direct material costs are the expenses for raw materials that can be directly traced to the production of specific goods or services.

Variable Manufacturing Overhead

Costs of manufacturing that vary directly with the level of production, aside from direct labor and materials.