Cost-Volume-Profit Analysis Is a Predictive Tool for Identifying the Impact

question 42

True/False

Cost-volume-profit analysis is a predictive tool for identifying the impact of future cost changes,price changes,and volume of activity changes.

---

Definitions:

Fixed Asset

Long-term tangible assets that are used in the operations of a business and are not expected to be consumed or converted into cash within a year.

Useful Life

The period over which an asset is expected to be used by an entity, or its lifespan for accounting purposes.

Residual Value

The estimated value of a fixed asset at the end of its useful life.

Average Rate

A mean value calculated to represent the typical rate of something, such as interest, return, or speed, over a given period.