On a CVP graph, the vertical distance between the total expense line and the total fixed cost line equals the operating income or operating loss.

Question

Quizplus · Accepted Answer

The vertical distance between the total expense line and the total fixed cost line on a CVP graph represents the total variable cost, not the operating income or operating loss. Operating income or loss is determined by the difference between the total sales revenue line and the total expense line at a given level of activity.

On a CVP Graph, the Vertical Distance Between the Total