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Whenever Cost-Volume-Profit (CVP) analysis is performed, a number of assumptions are made that affect the validity of the analysis. A primary assumption is that costs
Whenever Cost-Volume-Profit (CVP) analysis is performed, a number of assumptions are made that affect the validity of the analysis. A primary assumption is that costs can be accurately separated into fixed and variable components. In some companies this is a very difficult and costly task. Identify a company where this might be the case and discuss why the company may or may not choose to pursue utilizing CVP, include two references
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