Cost-volume-profit (CVP) analysis is a simple but powerful tool to assist management in making operating decisions. Which of the following does not represent a potential use of CVP analysis?
A) Ability to compute the break-even point.
B) Ability to determine optimal sales volumes.
C) Aids in evaluating tax planning alternatives.
D) Aids in determining optimal pricing policies.

Question

Quizplus · Accepted Answer

CVP analysis primarily focuses on understanding the relationship between costs, volume, and profit, and is not typically used for evaluating tax planning alternatives.

Cost-Volume-Profit (CVP) Analysis Is a Simple but Powerful Tool to Assist