Q1) Why does cost-volume-profit analysis focus on operating income instead of net income? prepare down the suppositions which underlie cost-volume-profit analysis. Describe the significance of incremental costs and revenue when considering alternative courses of action. Why is it significant for management to understand cost-volume-profit relationships? prepare down the effect of increase in activity on following items? Total variable costs and Variable costs per unit of activity. prepare down the difference between sunk cost and out-of-pocket expense?