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What is CVP Analysis?
Cost Volume Profitability Analysis (CVP Analysis) is the study of the relationship between revenues, costs and profits of a business. The analysis is used to examine the relationship among the total volume of an independent variable, total costs, total revenues and profits for a time period. Cost-volume-profit analysis is useful in the early stages of planning because it provides an easily understandable framework for discussing planning issues and organizing relevant data.
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