Insourcing incurs an annual fixed cost of $500,000 and a variable cost of $60 per unit. Outsourcing incurs an annual fixed cost
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Cost-volume-profit analysis can be extended to determine the effect on profit of other changes, such as changes in Income Tax rates.
<h3>What is Cost-volume-profit analysis?</h3>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.
where:
FC=Fixed costs
CM=Contribution margin=Sales−Variable Costs
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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