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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.
What are the basic characteristics of a relevant cost? Why are future costs not always relevant? Are all relevant costs found in accounting records?
Marginal Costing and Marginal Cost Marginal Costing is an optionally method of costing to absorption costing , In marginal costing, merely variable costs are charged like a
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The basic principles of standard costing and variance analysis may be adapted to the needs of relatively new methods of accounting such as activity-based cost
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