ECONOMICS

Detailed explanation-1: -Answer and Explanation: The statement is true. CVP analysis uses all the components mentioned to calculate the break-even point, and as a result, will also be able to predict the break-even point when any or all of those change in whichever direction.

Detailed explanation-2: -Cost Volume Profit (CVP) Analysis, also known as break-even analysis, is a financial planning tool that leaders use when determining short-term strategies for their business. This conveys to business decision-makers the effects of changes in selling price, costs, and volume on profits (in the short term).

Detailed explanation-3: -A CVP analysis is used to determine the sales volume required to achieve a specified profit level. Therefore, the analysis reveals the break-even point where the sales volume yields a net operating income of zero and the sales cutoff amount that generates the first dollar of profit.

Detailed explanation-4: -cost-volume-profit (CVP) analysis, helps managers predict how changes in costs and sales levels affect profit. In its basic form, CVP analysis involves computing the sales level at which a company neither earns an income nor incurs a loss, called the break-even point.

Detailed explanation-5: -Break-even analysis, a subset of cost-volume-profit (CVP) analysis, is used by management to help understand the relationships between cost, sales volume and profit. This techniques focuses on how selling prices, sales volume, variable costs, fixed costs and the mix of product sold affects profit.