Cost-volume-profit analysis

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Cost-volume-profit analysis is an extension of break-even analysis. CVP analysis enables managers to understand cost behavior and the effect on profits in response to a wide variety of influences, such as changes in volume, variable and fixed costs, and price. This helps management make appropriate business decisions. How would you use CVP analysis to develop a budget? Elaborate using examples.

Please answer the question in about 200 to 300 words.

Reference no: EM131289603

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