Marty Moser wants Moser Company to use CVP analysis to study the effects of changes in costs and volume on the company

Answer:

The components of CVP analysis

selling price per unit

Variable cost per unit

Total fixed costs

Manpower Cost Direct and indirect

Level or volume of activity.

The important assumptions of CVP analysis are:

Selling price, variable cost per unit, remain constant

and total fixed costs remain constant through the relevant level or range.

This means that a company can sell more or fewer units at the same price and that the company has no change in technical efficiency as volume changes..

Costs can be correctly classified into their fixed and variable portions.

And sometimes up to one range some expenses are fixed and variable after reaching the level those expenses turned as semi variable and semi fixed cost

Example :Electricity Charges will change after reaching the some level of units

These are main Assumptions of CVP analysis

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