Question

24. CVP analysis requires costs to be categorized as
(a) fixed variable
(b) Direct or indirect
(c) Product or period (d) Standard or actual​

Answer 1

Answer:

Correct option is (a) fixed variable

Answer 2

Answer:

The correct option is (a) fixed variable

Explanation:

• Cost-volume-profit (CVP) analysis exists as a process of cost accounting that examines the effect that varying groups of costs and volume keep on operating profit.
• Cost-volume-profit (CVP) analysis exists as a way to find out how differences in variable and fixed costs influence a firm's earnings.
• CVP analysis creates several assumptions, including that the sales expense, fixed, and variable costs per unit are consistent.

Hence, CVP analysis needs costs to be classified as (a) fixed variable.