A planning tool that expresses the relationships among costs,volume,and prices and their effects on
Profits and losses is called ________.

Question

Quizplus · Accepted Answer

Cost-volume-profit analysis (CVPA) helps businesses to assess their profitability under different conditions. It shows how changes in sales volume, costs, and prices affect the profit or loss of the business. CVPA helps businesses identify their breakeven point and target profit levels, as well as the contribution margin needed to achieve them. Target profit analysis, contribution margin ratio analysis, and breakeven point analysis are all specific applications of CVPA. Therefore, A is the best choice as it encompasses the other options.

A Planning Tool That Expresses the Relationships Among Costs,volume,and Prices