Final answer:
CVP analysis is not only used for break-even and target profit analysis, but also for analyzing the impact of changes in sales volume, selling price, and variable costs on a company's profitability.
Step-by-step explanation:
The statement "CVP analysis is only used for break-even and target profit analysis" is False. While break-even analysis and target profit analysis are common uses of CVP (Cost-Volume-Profit) analysis, they are not the only uses. CVP analysis is also used to analyze the impact of changes in sales volume, selling price, and variable costs on a company's profitability.
For example, CVP analysis can help a company understand how changes in sales volume will affect its profit. By examining the contribution margin per unit and the fixed costs, a company can determine at what sales volume it will break even or achieve its target profit.
Additionally, CVP analysis can be used to perform sensitivity analysis, which involves assessing the impact of variations in input assumptions on the outcomes of the analysis. This allows companies to evaluate different scenarios and make informed decisions.