CVP (Cost-Volume-Profit) analysis is most effective within the relevant range, where the assumptions about fixed and variable costs, and sales price remain valid. Outside this range, these assumptions may not hold, limiting the analysis's applicability.

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CVP Analysis Is;

Question 13

Multiple Choice

CVP analysis is;

A) Useful in all cases
B) Useful within the relevant range
C) Useless as it assumes a single product/service
D) Useless as it assumes that all costs can be divided into fixed and variable

Correct Answer: