Asked Dec 18, 2019

What is CVP analysis? Give three examples?


Expert Answer

Step 1

CVP Analysis:

CVP analysis establishes the relation between cost, volume and profit of the company. It determines the role of cost and volume that affects the revenue of the company. It is also known as break-even analysis.

Step 2

The uses of CVP analysis for managerial planning are given below:

  • The manager uses the CVP analysis to determine the change in the cost and volume of the production on the profit of the company.
  • The CVP analysis is used to calculate the contribution margin after considering a...

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