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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Describe the difference between the units sold approach to CVP analysis and the sales revenue approach.

To determine

Differentiate between units sold approach to CVP analysis and the sales revenue approach.

Explanation

CVP Analysis:

CVP analysis establishes the relation between cost, volume and profit of the company. It estimates the effect of changes in variable cost, fixed cost, volume of sales and price on the profit of the company.

Difference between units sold approach to CVP analysis and the sales revenue approach:

BasisUnits Sold ApproachSales Revenue Approach
Computation

All the computations in

units sold approach are

done in terms of units of

product...

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