Answer
CVP (Cost-Volume-Profit) analysis is a broader and more comprehensive approach than break-even analysis. It not only helps find the breakeven point but also explores how changes in volume, prices, variable costs, and fixed costs affect profitability. CVP analysis is a valuable tool for decision-making and understanding cost-profit relationships at different activity levels.
Work Step by Step
CVP (Cost-Volume-Profit) analysis is a broader and more comprehensive approach than break-even analysis. It not only helps find the breakeven point but also explores how changes in volume, prices, variable costs, and fixed costs affect profitability. CVP analysis is a valuable tool for decision-making and understanding cost-profit relationships at different activity levels.
