The systematic examination of the relationships among selling prices, volume of sales and production, costs, expenses, and profits is termed as:
A) contribution margin analysis.
B) cost-volume-profit analysis.
C) budgetary analysis.
D) gross profit analysis.

Question

Quizplus · Accepted Answer

Cost-volume-profit analysis is focused on analysing the relationships among selling prices, volume of sales and production, costs, expenses, and profits. The purpose is to identify how changes in these factors affect the overall profitability of a business. This analysis is useful for businesses to determine the sales volumes required to break even or achieve desired profit goals, and to make important decisions about pricing strategies, production levels, and cost management. Options A, C, and D are not accurate as they do not specifically refer to the relationships among selling prices, volume of sales and production, costs, expenses, and profits.

The Systematic Examination of the Relationships Among Selling Prices, Volume