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What are the biggest challenges for managers using cvp analysis to make product decisions? Why?

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Accounting

What are the biggest challenges for managers using cvp analysisto make product decisions? Why?

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In spite of CVP being a useful technique it suffers from some of the following challenges for the managers 1 Because of the many assumptions CVP is only an approximation at best CVP analysis needs estimates and approximation in assembling necessary data and thus lacks accuracy and precision 2 In CVP analysis it is assumed that total sales and total costs are linear and can be represented by straight lines In some cases this assumption may not be found true For instance if a business firm sells more units the variable costs per unit may decrease due to more operating efficiencies in the factory 3 CVP analysis is    See Answer
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What are the biggest challenges for managers using cvp analysisto make product decisions? Why?

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