The Concept of Cost Volume Profit Analysis Is Based on Classifying

question 16

Multiple Choice

The concept of cost volume profit analysis is based on classifying costs as

• A) fixed and variable costs.
• B) variable product and period costs.
• C) product controllable and uncontrollable costs.
• D) fixed and variable costs AND variable product and period costs.

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Definitions:

Personnel Expenses

Costs incurred by a business related to the compensation of its employees, including wages, benefits, and taxes.

Planning Budget

An estimated financial plan used primarily for strategic and operational planning within an organization.

Units

Basic quantities or entities used as a standard of measurement for inventory, production, or other business processes.

Selling and Administrative Expenses

Costs that are not directly tied to the production of goods or services, including marketing expenses, salaries of sales personnel, and management salaries.