alleryStart learning →Which two further concepts are named alongside the break-even point in CVP analysis?
AMargin of safety and leverage
BGoodwill and depreciation
CInventory and receivables
DDividends and retained earnings
Answer & Solution
Correct answer: A. Margin of safety and leverage
1. CVP analysis extends past the break-even calculation.
2. The discussion of CVP analysis begins with the break-even point.
3. Two further concepts are then introduced.
4. Those concepts are margin of safety and operating leverage.
_Source: OpenStax Principles of Accounting, Volume 2: Managerial Accounting (CC BY-NC-SA 4.0), Ch 3 'Cost-Volume-Profit Analysis'_
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