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Techniques of CVP Analysis
The CVP analysis deals with the price costs structure and the sales volume and identifies the profit figure with one or other combination of these variables . the key elements in the CVP analysis are selling price sales volume variable cost per unit total fixed costs and the sales mix (if the firm is dealing with more than one product at a time ).there are two basic techniques of CVP analysis these are :
1) The contribution margin analysis
2) Profit volume ratio
3) The break even analysis .
Assumption of break even analysis The break even analysis is based upon the following assumptions : 1) All elements of cost, i.e., production , administration and selling di
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