The requirement that companies pay income taxes does not affect their cost-volume-proﬁt relationships.

Name: The requirement that companies pay income taxes does not affect their cost-volume-proﬁt relationships.
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Question

Quizplus · Accepted Answer

Income taxes affect a company's profitability and thus, can affect its cost-volume-profit relationships. When a company pays income taxes, its net income decreases, which can affect its breakeven point and affect the number of units it needs to sell to make a profit.

The Requirement That Companies Pay Income Taxes Does Not Affect