What Is the Purpose of Doing a Cost-Volume-Profit (CVP) Analysis

question 102

Multiple Choice

What is the purpose of doing a cost-volume-profit (CVP) analysis?

• A) CVP analysis is effectively used by single-product firms only.
• B) CVP analysis provides managers with information used for control only.
• C) CVP analysis shows how revenues, expenses, and profits behave as volume changes.
• D) CVP analysis allows managers to do sensitivity analysis by examining the impact of various prices or costs on volume.

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Definitions:

On-Premise Computing

A model of IT management in which companies own their IT infrastructure (their software, hardware, networks, and data management) and maintain it in their data centers.

Business Environments

The combination of all internal and external factors that influence a company's operating situation, including customers, competitors, stakeholders, suppliers, industry trends, regulations, and other external forces.

Cloud Computing

The delivery of different services through the Internet, including data storage, servers, databases, networking, and software, aiming at flexibility, scalability, and cost-efficiency.

Reliability

The measure of consistency and dependability in a product's performance, ensuring it operates as expected over a given period.