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Cost Volume Profit (CVP) Analysis

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Cost Volume Profit Analysis

Cost-Volume-Profit (CVP) analysis is a managerial accounting technique that is concerned with the effect of sales volume and product costs on operating profit of a business. It deals with how operating profit is affected by changes in variable costs, fixed costs, selling price per unit and the sales mix of two or more different products.

CVP analysis has following assumptions:
1. All cost can be categorized as variable or fixed.
2. Sales price per unit, variable cost per unit and total fixed cost are constant.
3. All units produced are sold.

Where the problem involves mixed costs, they must be split into their fixed and variable component by High-Low Method, Scatter Plot Method or Regression Method.

MD. ABDUR ROUF:
Congrats

drrana:
good one

munna99185:
Informative post.

Thanks for sharing.

Sayed Farrukh Ahmed
Assistant Professor
Department of Business Administration
Faculty of Business & Entrepreneurship
Daffodil International University

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