In a CVP analysis, which of the following factors is NOT considered?
Practice Questions
1 question
Q1
In a CVP analysis, which of the following factors is NOT considered?
Selling price per unit
Variable cost per unit
Total fixed costs
Market demand
CVP analysis focuses on costs and revenues, not on market demand.
Questions & Step-by-step Solutions
1 item
Q
Q: In a CVP analysis, which of the following factors is NOT considered?
Solution: CVP analysis focuses on costs and revenues, not on market demand.
Steps: 4
Step 1: Understand what CVP analysis is. CVP stands for Cost-Volume-Profit analysis, which helps businesses understand how costs and sales volume affect profits.
Step 2: Identify the main components of CVP analysis. These include costs (fixed and variable), sales price, and profit.
Step 3: Recognize what CVP analysis does not include. It does not consider external factors like market demand.
Step 4: Conclude that the factor NOT considered in CVP analysis is market demand.
