CVP stands for?

CVP stands for?

• A. Cost-volume-profit analysis
• B. Cost-value- pricing
• C. Contribution-value-profit
• D. Capital-value-profit

Answer: (A)

Cost-Volume-Profit analysis is what CVP stands for. This term is the standard way to describe a method that links costs, the level of activity (volume), and profit to show how changes in selling price, costs, or volume affect profitability. It centers on contribution, since profit depends on how much contribution is available after variable costs to cover fixed costs and contribute to profit. The other phrases mix different ideas and aren’t the recognised expansion of CVP in management accounting, so they aren’t used as the meaning of CVP.

Cost-Volume-Profit analysis is what CVP stands for. This term is the standard way to describe a method that links costs, the level of activity (volume), and profit to show how changes in selling price, costs, or volume affect profitability. It centers on contribution, since profit depends on how much contribution is available after variable costs to cover fixed costs and contribute to profit. The other phrases mix different ideas and aren’t the recognised expansion of CVP in management accounting, so they aren’t used as the meaning of CVP.