How does the contribution margin affect the cost-volume-profit analysis?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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How does the contribution margin affect the cost-volume-profit analysis?
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Introduction :
Cost Volume Profit analysis means the breakeven analysis which generally used to determine the break even point for different sales volume and cost structures. It includes different types of assumptions for sales price, variable cost, fixed costs etc. It will be helpful to calculate the break even point. Break even point means no. of units that a organization must sell to cover the fixed cost.
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