Cost-volume-profit analysis is an analytic tool used to get a first-pass estimate of how changes in a business will ultimately affect profits and sustainability.

Question

Quizplus · Accepted Answer

Cost-volume-profit (CVP) analysis is a tool that helps businesses understand how changes in costs, sales volume, and price affect a company's profit. This analysis is crucial for decision-making regarding pricing, production levels, and choosing between different cost structures to ensure sustainability and profitability.

Cost-Volume-Profit Analysis Is an Analytic Tool Used to Get a First-Pass