Question

An important tool in predicting the volume of activity, the costs to be incurred, the sales to be made, and the profit to be earned is: Multiple Choice

Target income analysis.
Cost-volume-profit analysis.
Least-squares regression analysis.
Variance analysis.
Process costing.

Answer 1

Cost volume profit Analysis

Step-by-step explanation:

Cost volume profit Analysis is a tool which depicts the relationship between level of activity, revenue , cost and profit. It is an important tool adopted by accountants to help carry out any of the following analyses:

Break-even point - The level of activity to achieve a zero profit. Where no profit or loss is made .

Target profit Analysis; The level of activity to be that would he;p achieve a specific amount of profit

Margin of safety - To determine the amount by which budgeted sales exceeds the break-even sales