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COST PROFIT VOLUME ANALYSIS
Cost profit volume (CVP) analysis is an essential tool for profit planning. It can be explained as - ' a managerial tool showing the relationship among various ingredients of profit planning, that is, cost (fixed and variable), volume and selling price of activity. It presents information regarding-
1. Quantity of production and sales for a target profit level
2. Behavior in relation to volume
3. Amount of profit for a projected sales volume
4. Sensitivity of profits due to variation in output
5. Volume of production or sales, where the business will break even.
Variable Costs Are costs such raise or fall proportionately along with the level of activity that is such portion of the cost of an activity which changes along with the leve
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ADVANTAGES OF COST ACCOUNTING 1. It helps in efficient decision making. 2. It assists in cost drop. 3. It is useful in obsession of selling price
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