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Cost Volume- Profit

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For what is cost-volume-profit (CVP) analysis used? What are some of the key underlying assumptions that make CVP analysis useful for decision makers? Why might decision makers use CVP analysis?
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Cost Volume Profit analysis is used to understand the relationship between total revenues, total costs, and operating income as we change the selling price, output level, variable cost per unit, or fixed costs of a product or service.
The key assumptions underlying the CVP analysis are
1. The ...

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