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Cost volume profit analysis
Meaning and definition
Cost volume profit analysis is a technique for studying the relationship between cost volume and profits . profits of an undertaking depend upon a large number of factors. But the most important of these factor are the cost of manufacture volume of sales and the selling prices of the products.
In the words of herman c . heiser the most significant single factor in profit planning of the average business is the relationship between the volume of business costs and profit . the CVP relationship is an important tool used for the profit planning of a business .
Illustration of Graphic Analysis The four steps of cost-volume-profit analysis can be employed to graph and study any cost-volume relationship. Suppose that you have been aske
State the factors of CVP The three factors of CVP analysis I e cost volume and profit are interconnected and dependent on one another . for example profit depends upon sales se
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Barker Company has a single product called a Zet. The company normally produces and sells 80,000 Zets each year at a selling price of $40 per unit. The company’s unit costs at this
Steps in Strategic Cost Analysis 1) Recognize the suitable value chain and allocate costs and assets to it. 2) Identify the cost drivers of each value activity and how they int
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