To apply CVP analysis in a not-for profit organization ________.
A) managers need to focus on the customer base rather than the cost drivers
B) managers need to focus on measuring their output, which is the same as tangible units sold by manufacturing and merchandising companies
C) managers need to focus on measuring their input, which is different from the tangible units consumed by manufacturing and merchandising companies
D) managers need to focus on measuring their output, which is different from the tangible units sold by manufacturing and merchandising companies

Question

Quizplus · Accepted Answer

In a not-for-profit organization, managers typically do not sell tangible units like manufacturing and merchandising companies. Therefore, they need to focus on measuring their output in terms of services provided or activities performed, which may be different from tangible units sold by other types of companies. CVP analysis can still be applied by considering the revenue and cost drivers associated with the organization's activities or services.

To Apply CVP Analysis in a Not-For Profit Organization ________