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Cost-volume-profit (CVP) analysis estimates how changes in costs (both variable and fixed), sales volume, and...

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Accounting

Cost-volume-profit (CVP) analysis estimates how changes in costs (both variable and fixed), sales volume, and price affect a company's profit. CVP is a powerful tool for planning and decision making. In fact, CVP is one of the most versatile and widely applicable tools used by managerial accountants to help managers make better decisions. Companies use CVP analysis to reach important benchmarks, such as their break- even point. One of the main topics covered in this course deals with the concept of the break-even point.

Define this concept and make sure to provide an example. The example may be of a company you've worked with or another company that has gone thru this break-even point. For instance, you may mention how long it took the company to reach the break-even point and the reasons as to why the company began with losses (negative operating income) until reaching the break-even point.

The book used in this course is Cornerstones of Managerial Accounting

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