Why is the Contribution Income Statement very useful in a CVP analysis?© BrainMass Inc. brainmass.com October 10, 2019, 4:05 am ad1c9bdddf
The cost-volume-profit (CVP) is a "tool that helps managers understand the relationships among cost, volume, and profit" (Brewer, Garrison & Noreen, 2007, p. 240). Cost-volume-profit (CVP) analysis is concerned with the effects on net operating income of:
1. Selling prices
2. Sales volume
3. Unit variable costs
4. Total fixed costs
5. The mix of products sold.
The CVP ...
This solution discusses why the contribution income statement is useful in a CVP analysis.