Cost-volume-profit (CVP) analysis can be used by a company to

• determine break-even point by assigning a zero value to the profit figure.

• study the interrelationships of >• prices,

>■ volumes,

>- contribution margins.

• calculate the level of sales volume necessary to achieve specific before- or after-tax target profit objectives.

• enhance a manager’s ability to positively in¬ fluence current operations and to predict future operations, thereby reducing the risk of uncer¬ tainty.

 LO.1