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Cost-volume-profit (CVP) analysis is based entirely on unit costs.” Do you agree? Explain.

  • accounting -

    We'll be glad to comment on your answer.

  • accounting... -

    i have no idea.....

  • accounting -

    What did you learn in your text about CVP?

    If you can't find it there, check this site.

    http://en.wikipedia.org/wiki/Cost-Volume-Profit_Analysis

  • accounting update( this right) -

    “Cost-volume-profit (CVP) analysis is based entirely on unit costs.” Do you agree? Explain.
    No I believe it is in both fixed and variable costs. Changes in activity are the only factors that affect costs.

  • accounting -

    I agree.

  • accounting (this right) -

    7) . How should mixed costs be classified in CVP analysis? What approach is used to effect the appropriate classification?

    Most of your costs are going to be semi-mixed/semi-variable. You will have to try to segregate the two types of costs, fixed and variable that's really the only way to do it. You have several options in how to separate them - either using your own judgment (i.e., work with management to determine what the cost would be if there would be no manufacturing activity?). The second method would be using statistics. Here, there are several options, like a scatter chart, regression analysis

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