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Does your organization use CVP analysis as part of its planning or decision-making process? How does it use it? What other areas can you think of where this technique could be used?
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Yes we use CVP for decision making. CVP is a management accounting tool that express relationship between sales volume, cost and profit. Changes in fixed cost, variable cost or the sale price or volume will impact the CVP analysis.
This can be used to make advantageous decisions concerning rates, prices, effect on operating costs and profits.This analysis is especially useful when considering volume and plant expansion. If the firm is to avoid losses, …
