Answer to Question #250688 in Accounting for Kjconcepcion

Question

A company is making plans for next year, using cost volume profit analysis as its planning tool next year sales data about its product are as follow

Answer 1

CVP analysis is a planning tool that allows management to forecast the volume of activity, costs, sales values, and profits. We look at the effect of three factors (Costs, Sales Volume, and Sales Price) on one variable (Profit) in CVP analysis.