For what is cost volume profit (CVP) analysis used? What are some of the key underlying assumptions that make CVP analysis useful for decision makers? Why might decision makers use CVP analysis?

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(1). For what is cost volume profit (CVP) analysis used? What are some of the key underlying assumptions that make CVP analysis useful for decision makers? Why might decision makers use CVP analysis? (2). What are the differences between variable and absorption costing? Why is variable costing not allowed for GAAP reporting? Which method is more useful for internal decision making? Why? As a manager, which would you prefer? Why? (3). What are equivalent units? Why do we need to calculate equivalent units? Why are they calculated separately for materials and conversion costs? How do they impact the cost of the products?

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