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Unformatted text preview: cuts increases is indicative that all costs do not increase in proportion to volume. As we have seen, several costs are either fixed, have fixed components, or are step function in nature. •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••
The purpose of cost-volume-profit analysis is to determine either (a) the volume of activity needed for an organization to achieve its profit goal, (b) the price that an organization needs to charge to achieve its profit goal, or
(c) the cost limits (fixed and/or variable) that an organization needs to adhere to to achieve its profit goal.
CVP analyses usually are done for a particular activity within an or...
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- Spring '14