Cost profit volume analysis, Cost Accounting

COST PROFIT VOLUME ANALYSIS

Cost profit volume (CVP) analysis is an essential tool for profit planning. It can be explained  as - ' a managerial tool showing the relationship among various ingredients of profit planning, that is, cost (fixed and variable), volume and selling price of activity.  It presents information regarding-

1. Quantity of production and sales for a target profit level

2. Behavior in relation to volume

3. Amount of profit for a projected sales volume

4. Sensitivity of profits due to variation in output

5. Volume of production or sales, where the business will break even.

Posted Date: 10/15/2012 6:57:30 AM | Location : United States







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