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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 .
Adjacent extreme points differ in only one variable The first observation indicates that we can identify the extreme points of the solution space algebraically by setting zero as
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cases with solution..
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Cost comprise impact Some of the policy choices which tend to have the maximum impact on cost comprise: Product performance, configuration, and characteristics Mix and
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