--%>

Define Cost Volume-Profit relationship

Describe briefly Cost Volume-Profit relationship?

E

Expert

Verified

Cost Volume-Profit (or CVP) relationship is determination that studies the relationships among the subsequent factors and its affect on the amount of profits.

- Total sales amount and selling price per unit Total cost that might be in any form that is, fixed cost or Variable cost.

- Volume of sales

In easy terms, CVP is a management accounting instrument which signifies relationship among total sales, profit and total cost. Cost Volume-Profit relationship is one of the significant techniques of cost and management accounting. It is a powerful instrument that gives the entire picture of the profit structure and aids in planning of profits. It can as well answer what if type of questions by telling the volume needed to produce. This concept is applicable in all decision making regions, mainly in the short run.

   Related Questions in Managerial Economics

  • Q : Determine the demand when Demand and

    Suppose that the auto market started at the intersection of D0S0, and in that case automakers opened foreign assembly plants after discovering which competent foreign employees worked for minor wages. How would it influence the auto market?: (

  • Q : Equal pay for equal work rule Rigid

    Rigid enforcement of “equal-pay-for-equal-work” law would: (w) raise the wage of minority workers who had been discriminated against. (x) lower the wages of “favored” non minority workers who had received higher wages before. (

  • Q : What are the important areas of

    What are the important areas of decision-making?

  • Q : State Extrapolation statistical Method

    States the Extrapolation statistical Method of Demand Forecasting?

  • Q : Illustrates the term Dumping

    Illustrates the term Dumping?

  • Q : Function of Profit Maximization in

    For a purely competitive firm operating within a competitive labor market as: (1) the marginal resource cost of labor exceeds the wage rate. (2) the supply of labor is perfectly inelastic. (3) total labor costs are independent of the

  • Q : HW Hello, Would you please find a small

    Hello, Would you please find a small case study in managerial economics. please I don't want the typical solution because the prof have it. thanks

  • Q : Marginal Revenue Product of Labor When

    When a firm hires 1 unit of additional labor that increases output through two units, and marginal revenue is $100, the marginal revenue product of labor is: (w) $100. (x) $50. (y) $150. (z) $200. How can I solve m

  • Q : What are the tools and techniques for

    What are the tools and techniques for demand estimation?

  • Q : Relation between Average Revenue

    Illustrates the relation between Average Revenue, Total Revenue and Marginal Revenue?