Part 1) Discuss cost-volume-profit (CVP) analysis. What are some potential benefits of using CVP?

Part 2) Look at the three business proposals below. What are some things we would need to consider/determine before making these decisions?

Proposal 1: The Director of Advertising has proposed that we increase our advertising 10% this year.

Proposal 2: Our Regional Manager for the Southeast division has suggested that we increase the size of one of our manufacturing facilities. The facility is currently 20,000 square feet, and he is recommending a 5,000 square foot addition. He feels that this could increase sales in that region by up to 20%.

Proposal 3: Our Vice President of Sales is proposing a 10% price increase on our best selling product. The market for this product is fairly competitive, and we have previously been able to sell high volumes by offering consumers a low-cost alternative. He feels that this price increase would bring us more in line with the competition.