[SOLVED] CVP Analysis
Im stuck on a Business question and need an explanation.
Cost-volume-profit analysis, or CVP, is something companies use to figure out how changes in costs and volume affect their operating expenses and net income.?In other words, CVP is a methodical analysis of the dynamic inter-relationship between?selling?prices, sales and production volume, cost expenses, and profits.
Respond to one or more of the following in a minimum of 175 words:
- Explain each of the three elements of CVP analysis. Discuss how managers use CVP analysis.
- “Break-even analysis is of limited use to management because a company cannot survive by just breaking even.” Do you agree? Explain.
- How does a company’s operating leverage effect its profitability?
- Discuss the concepts of relevant costs and incremental costs. How do they relate? Provide examples.
- In what type of business decisions can incremental analysis be used?