Questions:
1. How does assuming that operating activity occurs within a relevant range affect cost-volume-profit analysis?
2. List three methods to measure cost behavior.
3. How is a scatter diagram used to identify and measure the behavior of a company's costs?
4. In cost-volume-profit analysis, what is the estimated profit at the break-even point?
5. Assume that a straight line on a CVP chart intersects the vertical axis at the level of fixed costs and has a positive slope that rises with each additional unit of volume by the amount of the variable costs per unit. What does this line represent?