CVP Analysis.doc - Running Head COST VOLUME PROFIT ANALYSIS Cost Volume Profit Analysis Students Name Institutions Name 1 COST VOLUME PROFIT ANALYSIS 2

CVP Analysis.doc - Running Head COST VOLUME PROFIT ANALYSIS...

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Running Head : COST, VOLUME, PROFIT ANALYSIS 1 Cost, Volume, Profit Analysis Student’s Name Institution’s Name
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COST, VOLUME, PROFIT ANALYSIS 2 Company or Business’ total cost consist of both variable and fixed costs. Fixed costs remain constant throughout the process of production. Therefore, fixed costs are not dependent on the output levels. On the other hand, variable costs are those costs that fluctuate depending on the level of the output of the product or service being offered (L eBruto, Ashley, & Quain, 1997). Variable cost is reliant on output level such that if the level of output increases it increases. In the case of producing Personal Computers (PCs), the fixed costs will include facility rent and the one-time cost of buying computing testing machine. These fixed costs especially rent will not change even if no computer is produced. Variable costs will comprise labour costs, computer material costs, electricity costs among others. These variable costs will be influenced
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