The data needed for cost-volume-profit analysis is readily available if the income statement is prepared under absorption costing.

Question

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Cost-volume-profit (CVP) analysis requires a breakdown of fixed and variable costs, which is not directly provided by income statements prepared under absorption costing, as this method allocates all manufacturing costs to products, including both fixed and variable costs, without separating them.

The Data Needed for Cost-Volume-Profit Analysis Is Readily Available If