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On a CVP graph, the break-even point is the point at which the contribution margin line crosses the total cost line. The target sales level
On a CVP graph, the break-even point is the point at which the contribution margin line crosses the total cost line. The target sales level equals fixed costs plus variable costs divided by the contribution margin ratio. Contribution margin is equal to fixed costs at the break-even point. The high-low method requires three observations of costs to calculate the cost formula
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