Cost-volume-profit [CVP] analysis is a widely-used, basic business model. Discuss the underlying assumptions made in the application of the model and whether or not these limit the usefulness of the model. Would you rely on the model?

1. Cost-volume-profit [CVP] analysis is a widely-used, basic business model. Discuss the underlying assumptions made in the application of the model and whether or not these limit the usefulness of the model. Would you rely on the model?2. Variable costing is often suggested as a solution to the incentive to overproduce inherent in absorption costing. How does variable costing differ from absorption costing? What are the advantages of variable costing? What are the potential problems with variable costing?