In performing short-term CVP analysis for a new product or service, the decision-maker would:

Question

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In short-term CVP (Cost-Volume-Profit) analysis, the focus is on the incremental or additional costs and revenues associated with a decision. Therefore, only incremental fixed costs, which are the fixed costs that will change as a direct result of the decision to introduce a new product or service, should be included. This excludes current, future, and allocated fixed costs that do not change with the decision.

In Performing Short-Term CVP Analysis for a New Product or Service