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Explain cost-volume-profit analysis

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Explain cost-volume-profit analysis, including an explanation of the calculation and the components. In what three ways can the contribution margin be useful in cost-volume-profit analysis? What does the term break-even point mean? Name the two ways it can be measured.

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This solution provides an explanation of cost-volume-profit analysis, describing ways in which the contribution margin can be used and what the term 'break-even point' means.

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I describe Cost-Volume-Profit analysis as an analysis used to measure the amount of volume needed in order for total revenues and total costs to be equal in dollar amounts. The contribution margin is when you calculate the difference between ...

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