Cost Volume Profit (CVP) analysis, also known as break-even analysis, is a financial planning tool that executives use to set the short-term strategy for their business. It informs corporate decision makers of the (short-term) impact on profit of changes in selling prices, costs, and quantities.
CVP analysis aims to determine the outputs that drive company value, highlight the impact of fixed costs, break-even points, target profits, and determine sales figures and sales forecasts. CVP analysis makes pricing decisions and pricing structures easier.
CVP analysis estimates how changes in a company's fixed and variable costs, sales volume, and price affect the company's profits. This is a very powerful tool in finance and accounting. It is one of the most commonly used tools in management accounting to help managers make better decisions.
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Answer:
The opening balance is the amount of money that is available in the bank at the beginning of each financial period, such as the start of each month or each year. It is the amount brought forward and first figure entered in the account at the beginning of each period. When the amount is newly opened, the opening balance is the first amount entered in the account
Therefore, the opening balance is the difference between the closing balance and the deposit less the withdrawals within a period
Closing Balance = The Opening Balance + Total Income - Total Expense
Therefore;
<em>The Opening Balance = Closing Balance - Total Income + Total Expense</em>
Explanation:
Answer:
Profit of One unit in excess of break even point = $20
Explanation:
Break even point is where Sales =Total cost
Normal profit per unit $45--25$-$10 = $10
Profit of Units in Excess of Break Even Volume
Sales Price -Variable Cost
= $45- $25 = $20
