Cost-volume profit is used to analyze
A)the behaviour of some costs and revenues as changes occur in the output level.
B)the behaviour of total costs, total revenues, and operating income as changes occur in the output level.
C)a single revenue driver and multiple cost drivers in special case CVP.
D)multiple revenue drivers and a single cost driver in special case CVP.
E)the behaviour of variable costs at all levels of output.

Question

Quizplus · Accepted Answer

Cost-volume profit analysis is used to understand the behaviour of total costs, total revenues, and operating income as changes occur in the output level. It helps in determining the breakeven point and the level of production required to achieve a desired operating income. It takes into account all the cost and revenue components and provides a holistic view of the impact of changes in output on the profitability of a business.

Cost-Volume Profit Is Used to Analyze