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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.
Find Out Overhead Application Rate The given is the budget of Superb Engineering Works for the 2002 year Factory overheads Kshs 62,000
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