In CVP analysis, the graph of total revenues versus total costs is linear in nature relation to units sold within a relevant range and time period.

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This is the definition of the breakeven point, which is a key component of CVP analysis. The linear relationship assumes that variable costs remain constant per unit, and fixed costs remain constant in total. Within this relevant range, the graph of total revenues versus total costs will be a straight line, allowing for easy calculation of the breakeven point and potential profits.

In CVP Analysis, the Graph of Total Revenues Versus Total