Cost-volume-profit analysis is used primarily by management:
A)as a planning tool
B)for control purposes
C)to prepare external financial statements
D)to attain accurate financial results

Question

Quizplus · Accepted Answer

Cost-volume-profit analysis is primarily used as a planning tool to help management make informed decisions about pricing, sales volume, and cost structure. It can also be used for control purposes, but its main purpose is to assist in the planning process. It is not used to prepare external financial statements or to attain accurate financial results, as it is a simplified model that does not account for all business factors.

Cost-Volume-Profit Analysis Is Used Primarily by Management