INTRODUCTION TO BUSINESS ACCOUNTING - D774
QUESTIONS WITH VERIFIED ACCURATE ANSWERS
C-V-P analysis focuses on the relationship between - Answers - the various costs of a
business and the volume of units sold.
Careful analysis of a company's cost structure can provide insight into the - Answers -
volume of products that need to be sold to achieve a specified level of profit—hence the
name cost-volume-profit analysis.
To effectively use C-V-P analysis to manage costs and plan profitability, - Answers - it is
necessary to first identify the activities in an organization that need to be managed and
planned.
A company's cost, revenue, and profitability planning will focus on these - Answers -
identified activities and analyze how costs and revenues change with each level of
activity
three most important concepts to understand about C-V-P: - Answers -
To use cost-volume-profit analysis, how must costs be partitioned? - Answers - All costs
must be partitioned into two categories—fixed and variable.
The basic objective of C-V-P analysis is to determine - Answers - how a company's
activity levels impact profits
An activity level would be - Answers -
The basic C-V-P concept is that the difference, or margin, between revenues and
variable costs - Answers - must first be used to cover fixed costs. Once the organization
covers fixed costs and achieves the break-even point, any remaining margin becomes
profit
C-V-P equation - Answers - Sales Revenue−Variable Costs−Fixed Costs=Profit
What are the components of the C-V-P equation? - Answers - The C-V-P equation is
Sales Revenue − Variable Costs − Fixed Costs = Profit.
The difference between revenues and variable costs is referred to as - Answers -
contribution margin
Contribution Margin - Answers - The difference between total sales and variable costs;
the portion of sales revenue available to cover fixed costs and provide a profit.
QUESTIONS WITH VERIFIED ACCURATE ANSWERS
C-V-P analysis focuses on the relationship between - Answers - the various costs of a
business and the volume of units sold.
Careful analysis of a company's cost structure can provide insight into the - Answers -
volume of products that need to be sold to achieve a specified level of profit—hence the
name cost-volume-profit analysis.
To effectively use C-V-P analysis to manage costs and plan profitability, - Answers - it is
necessary to first identify the activities in an organization that need to be managed and
planned.
A company's cost, revenue, and profitability planning will focus on these - Answers -
identified activities and analyze how costs and revenues change with each level of
activity
three most important concepts to understand about C-V-P: - Answers -
To use cost-volume-profit analysis, how must costs be partitioned? - Answers - All costs
must be partitioned into two categories—fixed and variable.
The basic objective of C-V-P analysis is to determine - Answers - how a company's
activity levels impact profits
An activity level would be - Answers -
The basic C-V-P concept is that the difference, or margin, between revenues and
variable costs - Answers - must first be used to cover fixed costs. Once the organization
covers fixed costs and achieves the break-even point, any remaining margin becomes
profit
C-V-P equation - Answers - Sales Revenue−Variable Costs−Fixed Costs=Profit
What are the components of the C-V-P equation? - Answers - The C-V-P equation is
Sales Revenue − Variable Costs − Fixed Costs = Profit.
The difference between revenues and variable costs is referred to as - Answers -
contribution margin
Contribution Margin - Answers - The difference between total sales and variable costs;
the portion of sales revenue available to cover fixed costs and provide a profit.
