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Which of the following forms a part of decision making in CVP analysis? decision to advertise...

Which of the following forms a part of decision making in CVP analysis?
decision to advertise
selection of inventory method for financial reporting purposes
decision to form a capital policy
decision to improve the efficiency of the work force
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Answer #1

Decision to advertise can be made based on CVP analysis, by finding whether there can be any improvement or incremental Net Operating income due to sales volume increase due to advertisement expeses increase.

Selection of Inventory method for financial reporting purpose is of management choice adhering to generally accepted accounting principles, it doesnot relate to any CVP analysis.

Decision to form a capital policy is based various other techniques not of CVP analysis.

Decision to improve effeciency of the work force is based on various technologies and skilled manpower appointment etc.

So answer is Decision to advertise.

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