CVP analysis is most likely to be used for:
A) A decision to merge two organizations
B) Separating mixed costs into fixed and variable portions
C) Predicting the costs of a long term project
D) Predicting profits across a range of operations

Question

Quizplus · Accepted Answer

CVP (Cost-Volume-Profit) analysis is a tool used to predict profits across a range of operations by examining the relationship between sales volume, costs, and profits. It helps in making decisions about pricing, sales techniques, and production levels to achieve a particular level of profitability. Hence, option D is the best choice for this question. Options A, B, and C are not relevant to CVP analysis.

CVP Analysis Is Most Likely to Be Used For