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Explain the components of cost-volume-profit analysis.

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Explain the components of cost-volume-profit analysis. Use cost-volume-profit analysis and break-even analysis to make business decisions.

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Your tutorial is 255 words and explains CVP and gives two examples of how CVP is used in businesses.

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Cost volume profit analysis is a process of isolating the variable and fixed portions of expenses so that you can see how volume impacts profits. Why does that matter? Sales volume does not cause fixed costs to shift (within the relevant range), so profit moves only in relation to sales price and variable costs. Since all costs do not ...

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