An important tool in predicting the volume of activity,the costs to be incurred,the sales to be made,and the profit to be earned is:
A)Target income analysis.
B)Cost-volume-profit analysis.
C)Least-squares regression analysis.
D)Variance analysis.
E)Process costing.

Question

Quizplus · Accepted Answer

Cost-volume-profit analysis is an important tool that helps in predicting the volume of activity, the costs to be incurred, the sales to be made, and the profit to be earned. It provides a clear picture of the relationship between sales volume, costs, and profits, helping businesses to make informed decisions regarding pricing, cost management, and capacity planning. The analysis involves creating a break-even analysis and analyzing the impact of different levels of production or sales on the net income.

An Important Tool in Predicting the Volume of Activity,the Costs