To which function of management is CVP analysis most applicable?

Question

Quizplus · Accepted Answer

CVP (cost-volume-profit) analysis is a tool used to determine how changes in volume, prices, and costs will impact a company's profit. It is most applicable to the planning function of management, as it helps managers make informed decisions regarding pricing, sales volume, and cost structure. Through CVP analysis, managers can identify the breakeven point, determine the level of sales needed to achieve a target profit, and assess the impact of changes in variables such as price or cost on the company's profitability.

To Which Function of Management Is CVP Analysis Most Applicable