Profit Analysis and Cost Volume or CVP Analysis
CVP Analysis checks the relationship between profit, activity level and the cost.
CVP Analysis assists in a broad range of profit planning and decision making conditions involving
a) The effect of production method changes
b) The effect of changes in product mix
c) The viability of particular sales promotion campaign
d) The level at that service should be required to break-even
e) The impact of price changes on profit like price changes.