Question

CVP is the acronym for costs volume and profit and invetigates how profit is affacted by selling prices, costs, and sales mix

True
false

Answer 1

CVP stands for Costs, Volume, and Profit. It is a concept in business and managerial accounting that investigates how profits are affected by selling prices, costs, and sales mix.

Step-by-step explanation:

CVP stands for Costs, Volume, and Profit. It is a concept in business and managerial accounting that investigates how profits are affected by selling prices, costs, and sales mix. CVP analysis helps businesses understand how changes in these factors impact their profitability.

For example, by analyzing CVP, a company can determine the break-even point, which is the level of sales needed to cover all costs and achieve zero profit. It can also help businesses make pricing decisions, determine the optimal sales mix, and evaluate the impact of cost changes on profit.

In summary, CVP analysis allows businesses to understand the relationship between costs, volume of sales, and profits, helping them make informed decisions and maximize their profitability.