Which of the Following Statements Is Correct with Regard to a CVP

question 120

Multiple Choice

Which of the following statements is correct with regard to a CVP graph?

• A) A CVP graph shows the maximum possible profit.
• B) A CVP graph shows the break-even point as the intersection of the total sales revenue line and the total expense line.
• C) A CVP graph assumes that total expense varies in direct proportion to unit sales.
• D) A CVP graph shows the operating leverage as the gap between total sales revenue and total expense at the actual level of sales.

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Definitions:

Modeling

A psychological phenomenon where individuals learn and replicate behaviors observed in others.

Reinforcement

The desirable or undesirable stimuli that result from an organism’s behavior.

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The concentration of substances in the nervous system that transmit signals between neurons, affecting mood, sleep, concentration, and more.