A-LevelAccountingTraditional costing methods9706/12 · May/June 2023 · Q301 Mark

Why would a business use cost-volume-profit analysis?

Ato act as a basis for long-term planning

Bto assist in the valuation of inventory

Cto decide which costs are fixed and which are variable

Dto understand the relationship between sales volume and profit

✓ Correct answer

D: to understand the relationship between sales volume and profit

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Topic: Traditional costing methods, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, May/June 2023 Paper 1 Variant 2, question 30.

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