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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