2. Contents
Introduction of CVP Analysis.
Features of CVP analysis.
Objectives of CVP analysis.
Break even point.
Analysis of BEP with graphs.
3. INTRODUCTION
Cost- The combination of material,labour and expenses
can be cost.
Volume- It is the number of unit produced or selling
quantity of product during a given period of time.
Profit- The excess of business income over the business
expenses.
4. CVP ANALYSIS
DEFINITION- CVP Analysis is used to determine ,how changes in
costs , volume and profit affect a companies operating income
and net income.
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AFFECT AND RELATIONSHIP OF CVP ANALYSIS
Profit Sales Cost Volume of production
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Cost
Volume
Profit
5. BREAK EVEN POINT
The break even point is the production
level where total revenues equals total
expenses. In other words, the break-even
point is where a company produces the
same amount of revenues as expenses
either during a manufacturing process or
an accounting period. Since revenues
equal expenses, the net income for the
period will be zero.