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It's related to Cost Accounting Course Find a numerical example of cost-volume-profit (CVP) analysis, and analyze...

It's related to Cost Accounting Course

Find a numerical example of cost-volume-profit (CVP) analysis, and analyze how CVP analysis is used for decision making?

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Answer #1

Example

For instance, Sales Price Per unit is 10, Variable Cost per unit is 8. Fixed cost is 10000. Then

Break Even Point will be      =     10000/(10-8) = 5000 units.

CVP analysis is used to analyse that how much minimum business an organization has to secure to ensure that it will not start losing its capital.

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