Final answer:
A cost-volume-profit (CVP) analysis is a financial tool used by businesses to determine the relationships between costs, volume of production, selling prices, profits, and sales mix. It helps businesses make informed decisions about pricing, production volume, and profitability.
Step-by-step explanation:
A cost-volume-profit (CVP) analysis is a financial tool used by businesses to determine the relationships between costs, volume of production, selling prices, profits, and sales mix. In the case of a restaurant, a CVP analysis would involve examining the cost of producing each menu item (including ingredients, equipment, rent, and labor) and determining the desired profit. By analyzing these factors, the restaurant can determine the price at which it should sell its menu items to achieve its desired profit margin. This analysis can help the restaurant make informed decisions about pricing, production volume, and profitability.