Question

Cost-volume-profit analysis can be extended to determine the effect on profit of other changes, such as ______.

Answer 1

Cost-volume-profit analysis can be extended to determine the effect on profit of other changes, such as changes in Income Tax rates.

What is Cost-volume-profit analysis?

An approach to determining how changes in variable and fixed expenses impact a company's profit is through cost-volume-profit (CVP) analysis.

Companies can utilize CVP to determine how many units they must sell to attain a specific minimum profit margin or break even (pay all expenditures).

CVP analysis makes a number of presumptions, among them the constancy of the sales price, fixed costs, and variable costs per unit.

$Breakeven Sales Volume= \frac{FC}{CM}$

where:

FC=Fixed costs

CM=Contribution margin=Sales−Variable Costs

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Simply add a goal profit per unit to the fixed-cost part of the calculation and use it to calculate a company's target sales volume.

To know more about CVP Analysis refer to: brainly.com/question/15001199

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