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Question 1

is a managerial accounting technique used to determine how changes in costs and volume affect a company’s operating income and net income.

Answer 1

Cost-Volume-Profit (CVP) analysis

Question 2

It helps businesses understand the relationship between cost, volume, and profit, and is essential for making informed decisions about pricing, production, and sales strategies.

Answer 2

Cost-Volume-Profit (CVP) analysis

Question 3

Contrasting with variable costs, —– —– do not vary directly with the scale of production. These are expenses that a business has to pay, regardless of output levels.

Answer 3

Fixed Costs

Question 4

are a key component in cost volume profit analysis. These are costs that change in direct proportion to production volume or the scale of operations.

Answer 4

Variable costs

Question 5

These cost contain both fixed and variable components and thus partly affected by fluctuation in the level of activity.
Examples are telephone bill, gas and electricity.

Answer 5

Semi- Variable Cost

Question 6

The sum of both variable and fixed costs at a particular level of output. Total costs increase as production levels rise due to variable costs, but the rate of increase becomes smaller due to the fixed cost spread over more units

Answer 6

Total Costs

Question 7

is the price at which one unit of the product or service is sold, while sales volume refers to the number of units sold within a specific period

Answer 7

Sales Price Per Unit and Sales Volume