About This Chapter
Cost-Volume-Profit Analysis Overview - Chapter Summary
Our top instructors have developed high-quality, informative lessons that simplify the process of studying cost-volume-profit (CVP) analysis. The lessons are short, easy to navigate and always available for review, helping you understand CVP analysis in no time. Closely examine concepts that include the break-even analysis, margin of safety, operating leverage and incremental analysis. Use short quizzes to gauge your knowledge of the lessons you review. Clarify information you don't fully grasp by sending questions to our experts, and get a comprehensive review of the chapter by taking the practice exam.
When finished, you will be ready to:
- Summarize how the relevant range affects cost, volume and profit
- Evaluate the use of CVP analysis to determine the relationship between company costs, revenue and sales volume
- Analyze and calculate the break-even analysis
- Calculate margin of safety in accounting
- Determine a business' sales mix with limited resources
- Conclude the impact a cost structure has on net income
- Break down the importance of operating leverage
- Explain the use of incremental analysis
1. Significance of the Relevant Range to CVP Relationships
Management must understand the cost of producing each item at different volumes of production. In this lesson, you'll learn how the relevant range impacts cost, volume and profit.
2. Cost-Volume-Profit Analysis & Income Statements
Cost-volume-profit (CVP) analysis is one way for management to determine the relationship that exists between a company's costs, its revenue, and its sales volume. In this lesson, we'll take a look at how a restaurant might use CVP to look at its revenue.
3. Break-Even Analysis: Definition & Example
Performing a break-even analysis can help you make decisions regarding how much of your product or service you need to sell to make a profit. In this lesson, you'll learn what a break-even analysis is and how it is calculated.
4. Margin of Safety in Accounting: Definition & Formula
In this lesson, we will explore margin of safety. We will define the term and apply it to some basic examples. Then, we'll calculate margin of safety before concluding with a summary and a quiz.
5. Computing the Sales Mix with Limited Resources
Businesses face limitations in producing their products or services. In this lesson, you'll learn how a business determines its optimal sales mix with limited resources.
6. Impact of Cost Structure on Net Income
Depending on how you decide to structure your costs, there could be an impact on net income. In this lesson, we see how to not only affect the net income with cost structure, but also how to track it.
7. Operating Leverage: Definition, Calculation & Examples
Explore the definition and importance of operating leverage, and take a look at examples to assist you in the accounting process. When you are finished with the lesson, there is a quiz to test your knowledge.
8. Incremental Analysis: Definition & Examples
Companies often have to make decisions based on vast amounts of data. Incremental analysis allows them to focus on the important information only. In this lesson, we'll learn how to use incremental analysis.
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Other chapters within the Accounting 303: Cost Accounting course
- Cost Classifications in Accounting
- Costing Methods & Techniques
- Formulas for Cost Accounting
- Standard Costs in Accounting
- Job Order Cost System in Accounting
- Process Cost System in Accounting
- Activity-Based Costing Overview
- Product & Service Costing
- Budgetary Process
- Cost Behavior Analysis
- Cost Estimation
- Service Department & Joint Cost Allocation
- Cost Accounting for Decision Making
- Ethics in Cost Accounting
- Modern Trends in Accounting
- Required Assignments for Accounting 303
- Studying for Accounting 303