In the graph method of CVP analysis, the total revenue line can be calculated by determining the total revenue at only one real output level because the starting point of the line is always the intersection of the X and Y axes.

Question

Quizplus · Accepted Answer

This statement is true. The total revenue line is a straight line that starts from the point where the X and Y axes intersect, and the slope of the line represents the unit selling price. Therefore, determining the total revenue at one real output level can help to calculate the slope of the line and the total revenue at any other output level.

In the Graph Method of CVP Analysis, the Total Revenue