TAILIEUCHUNG - Lecture Managerial accounting for managers (4e) - Chapter 3: Cost-volume-profit relationships

Cost-volume-profit (CVP) analysis helps managers understand the interrelationships among cost, volume, and profit by focusing their attention on the interactions among the prices of products, volume of activity, per unit variable costs, total fixed costs, and mix of products sold. It is a vital tool used in many business decisions such as deciding what products to manufacture or sell, what pricing policy to follow, what marketing strategy to employ, and what type of productive facilities to acquire. | Cost-Volume-Profit Relationships Chapter 3 Chapter 3: Cost-Volume-Profit Relationships Cost-volume-profit (CVP) analysis helps managers understand the interrelationships among cost, volume, and profit by focusing their attention on the interactions among the prices of products, volume of activity, per unit variable costs, total fixed costs, and mix of products sold. It is a vital tool used in many business decisions such as deciding what products to manufacture or sell, what pricing policy to follow, what marketing strategy to employ, and what type of productive facilities to acquire. Learning Objective 3-1 Explain how changes in activity affect contribution margin and net operating income. Learning objective 3-1 is to explain how changes in activity affect contribution margin and net operating income. Basics of Cost-Volume-Profit Analysis Contribution Margin (CM) is the amount remaining from sales revenue after variable expenses have been deducted. The contribution income statement .

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