_______ analysis is an important business decision-making tool because it predicts the effect of cutting overhead or raising prices on net income.
A)CVP
B)MVP
C)EVP
D)AVP

Question

Quizplus · Accepted Answer

CVP (Cost-Volume-Profit) analysis is a tool that helps in understanding the relationship between costs, volume of production, and profit. It is used to predict the effect of changes in volume, costs, and prices on net income. This analysis is useful for decision-making related to pricing strategy, production volume, and cost structure. Thus, Option A is the best choice among the given options.

_______ Analysis Is an Important Business Decision-Making Tool Because It