{"id":53,"date":"2015-06-03T19:27:08","date_gmt":"2015-06-03T19:27:08","guid":{"rendered":"https:\/\/courses.candelalearning.com\/managacct2x10xmaster\/?post_type=chapter&p=53"},"modified":"2015-12-27T15:21:45","modified_gmt":"2015-12-27T15:21:45","slug":"the-income-equation-and-contribution-margin-techniques","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-managacct\/chapter\/the-income-equation-and-contribution-margin-techniques\/","title":{"raw":"5.8 Cost-Volume-Profit Analysis Summary","rendered":"5.8 Cost-Volume-Profit Analysis Summary"},"content":{"raw":"
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Assumptions made in cost-volume-profit analysis<\/strong><\/h4>\r\n

To summarize, the most important assumptions underlying CVP analysis are:<\/p>\r\n

\u2022Selling price, variable cost per unit, and total fixed costs remain constant through the relevant range. This means that a company can sell more or fewer units at the same price and that the company has no change in technical efficiency as volume changes.<\/p>\r\n

\u2022In multi-product situations, the product mix is known in advance.<\/p>\r\n

\u2022Costs can be accurately classified into their fixed and variable portions.<\/p>\r\n

Critics may call these assumptions unrealistic in many situations, but they greatly simplify the analysis.<\/p>\r\n\r\n

CVP Graph<\/strong><\/h4>\r\n

\"cvp<\/a><\/p>\r\n

This video review the components of the CVP Chart or graph.<\/p>\r\nhttps:\/\/youtu.be\/Ei8SFrqZiag\r\n

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Assumptions made in cost-volume-profit analysis<\/strong><\/h4>\n

To summarize, the most important assumptions underlying CVP analysis are:<\/p>\n

\u2022Selling price, variable cost per unit, and total fixed costs remain constant through the relevant range. This means that a company can sell more or fewer units at the same price and that the company has no change in technical efficiency as volume changes.<\/p>\n

\u2022In multi-product situations, the product mix is known in advance.<\/p>\n

\u2022Costs can be accurately classified into their fixed and variable portions.<\/p>\n

Critics may call these assumptions unrealistic in many situations, but they greatly simplify the analysis.<\/p>\n

CVP Graph<\/strong><\/h4>\n

\"cvp<\/a><\/p>\n

This video review the components of the CVP Chart or graph.<\/p>\n

https:\/\/youtu.be\/Ei8SFrqZiag<\/p>\n

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