Which statement is true concerning the cost-volume-profit (CVP)model?
A)The CVP model can be used to determine a desired selling price.
B)The CVP model can be used to determine a new break-even point when fixed costs increase.
C)The CVP model can be used to determine a new break-even point when variable costs decrease.
D)All of the answers are correct.

Question

Quizplus · Accepted Answer

All of the given statements are true regarding the cost-volume-profit (CVP) model. The CVP model is a useful tool for managers to make decisions related to pricing, volume, and costs. It helps in determining the break-even point, which can be adjusted with changes in fixed or variable costs. Additionally, it can aid in determining the required sales volume to achieve a target profit, as well as the impact of changes in price or cost on the level of profitability. Hence, option D is correct.

Which Statement Is True Concerning the Cost-Volume-Profit (CVP)model