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COST-VOLUME-PROFIT RELATIONSHIPS

6 May, 2015 - 17:10

Cost-volume-profit analysis examines the interrelationships between costs, revenues, selling prices, revenues, production volume and profits. Cost-volume-profit analysis is based on data provided by accounting. Total costs are separated into

  1. variable costs which change with production level,
  2. fixed costs which do not change with production level, and
  3. mixed costs which are partly fixed and partly variable.