Cost-Volume-Profit Analysis
Essentials of CVP Analysis • What is Cost Volume Profit (Alias: CVP)? • Analysis tool that managers use to understand how profits will change as units sold, variable costs, fixed costs, selling price,or some combination of these, change •Relationship among these elements • What is it useful for? • To figure out how profits will change as the units sold of a product or service changes • To use "what-if" this happens analysis to examine the possible outcomes of different decisions so you can make an informed decision... like what? • Limitless - increase/decrease price? Advertise? Product mix? Change operating leverage? Etc. • In Excel, data can easily be changed to see how profitability will change when there are multiple changes within costs, selling price, and units sold • Be realistic in the analysis: • If you increase sales price... • More than likely units sold will decrease
Expert's Answer
Chat with our Experts
Want to contact us directly? No Problem. We are always here for you
Your future, our responsibilty submit your task on time.
Order Now
Get Online
Assignment Help Services
