Natasha's Flowers, a local​ florist, purchases fresh flowers each day at the local flower market. The buyer has a budget of $940 per day to spend. Different flowers have different profit​ margins, and also a maximum amount the shop can sell. Based on past experience the shop has estimated the following NPV of purchasing each​ type:   NPV per bunch Cost per bunch Max. Bunches Roses $2 $21 25 Lilies $9 $25 10 Pansies $4 $30 10 Orchids $19 $78 5

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A:

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Cost volume profit (CVP) analysis

CVP analysis is a cost-volume-profit technique of cost accounting that examines the influence of varying levels of expenses and volume on operating profit. Cost Volume Profit analysis determines the relationship between Cost, Sale Volume, sales price, and Profit. CVP analysis is also known as break-even analysis which helps the business organization, banks, and their management to determine and forecast how a change in total sales and cost affects the profit of the organization. CVP analysis helps in financial decision-making for the budget, expense, tax, market investment, and corporate finance and aims at measuring variations in cost and volume.