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XIII. Module 5000 Further Study MJH

Cost-Volume-Profit Analysis

 * Cost-volume-profit (CVP) analysis** is used to determine how changes in costs and volume affect a company's operating income and net income. In performing this analysis, there are several assumptions made, including:
 * Sales price per unit is constant.
 * Variable costs per unit are constant.
 * Total fixed costs are constant.
 * Everything produced is sold.
 * Costs are only affected because activity changes.
 * If a company sells more than one product, they are sold in the same mix.

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