Which of the Following Statements Is TRUE in a Cost-Volume-Profit

question 31

Multiple Choice

Which of the following statements is TRUE in a cost-volume-profit graph?

• A)The slope of the total cost line is dependent on the variable cost per unit.
• B)The total cost line normally begins at zero.
• C)The total revenue line typically begins above zero.
• D)The slope of the total revenue line is the contribution margin per unit.

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Definitions:

Relevant Range

The range of activity within which the assumptions about variable and fixed cost behavior are valid.

Comparative Income Statements

Financial statements that present the revenues, expenses, and net incomes of a business for multiple periods side by side for comparison.

Merchandising Company

A merchandising company is a business that purchases finished goods for resale, making profits through buying and selling rather than manufacturing.

Relevant Range

This concept in accounting refers to the span of activity or volume levels within which the assumptions about cost behavior are valid.