This presentation shows Cost-Volume-Profit Analysis Chart in a very detailed way. Total Costs are classified in Variable Costs and Fixed Costs. Breakeven point is obtained when Sales equals Total Costs.

1. COST-­‐VOLUME-­‐PROFIT
ANALYSIS
PAULINOSILVA
RESEARCHER
&
UNIVERSITY
LECTURER

2. CVP ANALYSIS
• Cost-­‐Volume-­‐Profit
(CVP)
Analysis
is
a
very
simplified
and
useful
framework
for
short-­‐
term
decision-­‐making;
• The
most
important
of
the
chart
analysis
is
the
point
where
Sales
equals
to
Total
Costs,
that
is
called
breakeven
point;
• At
this
point
there
is
no
profit
or
loss.
2

3. CVP ANALYSIS ASSUMPTIONS
• Constant
sales
price;
• Constant
variable
cost
per
unit;
• Constant
total
fixed
cost;
• Constant
sales
mix;
• Units
sold
equal
units
produced.
3

4. CVP ANALYSIS ABBREVIATIONS
4
FC
Total
Fixed
Cost
VC
Total
Variable
Cost
TC
Total
Cost
S
Sales
Q*
Breakeven
point
(in
units)
V*
Breakeven
point
(in
value)

5. Units
CVP ANALYSIS CHART
Value
5

6. FC
CVP ANALYSIS CHART
6
Value
Units

7. VC
FC
CVP ANALYSIS CHART
7
Value
Units

8. TC
VC
FC
CVP ANALYSIS CHART
8
Value
Units

9. TC
VC
FC
S
CVP ANALYSIS CHART
9
Value
Units

10. TC
VC
FC
S
CVP ANALYSIS CHART
Q*
10
Value
Units

11. TC
VC
FC
S
CVP ANALYSIS CHART
Q*
V*
11
Value
Units

12. TC
VC
FC
S
CVP ANALYSIS CHART
Q*
V*
12
Value
Units

13. TC
VC
FC
S
CVP ANALYSIS CHART
Q*
V*
Profit
13
Value
Units

14. TC
VC
FC
S
CVP ANALYSIS CHART
Q*
V*
Loss
Profit
14
Value
Units

15. J
THANK
YOU
VERY
MUCH!
PAULINOSILVA
www.paulinosilva.com