Cost Volume Profit Analysis Essay

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RESEARCH ASSIGNMENT Name of the candidate: Saksham Sharma Enrollment no: 05115901715 Course: BBA Batch: Morning Semester: 3 Subject Name: MANAGEMENT ACCOUNTING Subject code: BBA-207 TOPIC: -Briefly explain cost volume profit analysis, break-even point, margin of safety, angle of incidence, break-even level and discuss how all these are useful for managers for decision making Subject teacher name: Ms. SHIKHA DUA Date of submission: 18 October 2016 Assignment question:- Briefly explain cost volume profit analysis, break-even point, margin of safety, angle of incidence, break-even level and discuss how all these are useful for managers for decision making. Answer:- COST VOLUME PROFIT ANALYSIS Cost-volume-profit analysis, or CVP, is something companies use to figure out how changes in costs and volume affect their operating expenses and net income. CVP works by comparing different relationships, such as the cost of operating and producing goods, the amount of goods sold, and profits generated from the sale of those goods. By breaking down costs into fixed versus variable, CVP analysis gives companies strong insight into the profitability of their products or services.…show more content…
Cost, which means the expenses involved in producing or selling a product or service. 2. Volume, which means the number of units produced in the case of a physical product, or the amount of service sold. 3. Profit, which means the difference between the selling price of a product or service minus the cost to produce or provide it. Assumptions when using CVP analysis when managers use CVP analyses to make business decisions, the following assumptions are made: • All costs, including manufacturing, administrative, and overhead costs, can be accurately identified as either fixed or
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