CVP analysis is a tool that helps managers improve profit by answering "what if" questions.

Question

Quizplus · Accepted Answer

CVP analysis stands for Cost-Volume-Profit analysis and it is a tool used by managers to understand how changes in sales volume, costs, and prices can impact their profit. It helps them make better decisions by answering questions such as "what happens to our profit if we increase our selling price?" or "how many units do we need to sell to break even?". Therefore, the statement that CVP analysis helps managers improve profit by answering "what if" questions is true.

CVP Analysis Is a Tool That Helps Managers Improve Profit