Cost - Everything produced is sold. Costs are only affected...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Cost-Volume-Profit Analysis Cost-volume-profit (CVP) analysis  is used to determine how changes in costs and volume affect a  company's operating income and net income. In performing this analysis, there are several  assumptions made, including:  Sales price per unit is constant. Variable costs per unit are constant. Total fixed costs are constant.
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Everything produced is sold. Costs are only affected because activity changes. If a company sells more than one product, they are sold in the same mix. CVP analysis requires that all the company's costs, including manufacturing, selling, and administrative costs, be identified as variable or fixed....
View Full Document

This note was uploaded on 11/16/2011 for the course ACCT 2310 taught by Professor Staff during the Spring '09 term at Texas State.

Ask a homework question - tutors are online