A.
Cost-Volume-Profit Analysis: It is a method followed to analyze the relationship between the sales, costs, and the related profit or loss at various levels of units sold. In other words, it shows the effect of the changes in the cost and the sales volume on the operating income of the company.
To construct: a cost-volume-profit chart.
B.
To estimate: the break-even sales (dollars) by using the cost-volume-profit chart constructed in part (A).
C.
To explain: the main advantage of presenting the cost-volume-profit analysis in graphic form rather than equation form.
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