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Two examples of management decisions that benefit from CVP analysis

Two examples of management decisions that benefit from CVP analysis
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Below are the examples of Management decisions that benefit from CVP Analysis

1)Profit Planning- Cost Volume Profit analysis helps to find out how different operating decisions and marketing decisions will affect the Profit. It is a simple model that assumes sales volume is the primary cost driver. The CVP analysis can be used to find the desired profit in revenue and planning.

2) setting selling prices-- By Cost volume profit analysis, Selling Prices can be determined based on the target profit and also analysis of variable cost and fixed cost can be controlled which helps to reduce the selling prices and also will increase the sales volume

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