# Cost Volume Profit Analysis – CVP Analysis Research Papers & Essay Examples

Are you searching for an explanation of Cost-Volume-Profit (CVP) analysis? Read our article to learn the CVP definition, assumptions, and limitations. You’ll also find a formula for CVP calculation.

## 📊 Cost Volume Profit Graph: What You Need to Know

Before we dive deeper into analysis, let’s figure out a few definitions.

A CVP chart represents the Cost-Volume-Profit analysis graphically. It shows the relationship between the cost of produced units and their volume. It has 2 axes: the x-axis shows the volume of units sold, while the y-axis contains the total cost. The cost reflects fixed and variable expenses: the former remains constant, while the latter increases when the company manufactures more items. Companies use this chart to forecast the budget and make production schedules.

### What Is Cost Volume Profit Analysis?

The CVP analysis is also known as the break-even analysis. It determines how changes in sales volume and variable and fixed costs affect a company’s profits. It allows companies to calculate how many items they should sell to break even or achieve the margin of safety.

This method has several components:

• Variable expense ratio and contribution margin ratio,
• Break-even point,
• Safety margin,
• Net income changes,
• Operating leverage level.

### How Is Cost Volume Profit Analysis Useful?

Managers use the Cost-Volume-Profit analysis to make short-term business decisions. This method helps companies determine if they should invest their time and money in continuing or starting manufacturing a product. Moreover, the CVP analysis tells a business how many sales must be made to cover the cost of making a product or to generate a substantial profit.

## 📈 Cost Volume Profit Analysis: Assumptions & Limitations

Analysts make several assumptions when conducting a CVP analysis. While these assumptions help calculate the economic potential of a product, they also serve as limitations. For example, the analysis doesn’t consider the changes in the price of raw materials, labor, and other factors. In addition, it makes a hypothetical prognosis based on the company’s current expenses.

Let’s consider the main Cost Volume Profit analysis assumptions:

## 🧮 How to Calculate CVP: Key Elements

CVP calculation combines the abovementioned assumptions and uses a CVP formula. Below, you can find an explanation of all the involved elements.

### Break-Even Point of CVP

The break-even point is a point at which total revenue equals total costs. In other words, it is a situation when the business acquires neither profit nor loss.

Corporate accounting uses a special break-even point formula. It looks like this:

Break-Even Point (units) = Fixed Costs ÷ (Sales Price per Unit – Variable Costs per Unit)

In this formula, fixed costs are expenses that don’t change based on the number of units sold. It shows that a company reaches its break-even point when revenue covers all product manufacturing costs.

### CVP Graph: Formula

The CVP formula determines the break-even sales volume and looks like this:

Break-Even Sales Volume = Fixed Costs ÷ Contribution Margin

To find the contribution margin, you should subtract variable costs from total sales.

There are several uses for the CVP formula. First, it can be used to calculate the break-even point of a product. Second, the formula can be applied to find the target sales volume. Companies can do this by adding a target profit to the fixed-cost component. This way, they can identify the number of units they need to sell to reach their target profit.

In summary, businesses don’t always know whether to invest in a new product. The Cost-Volume-Profit analysis addresses this problem by giving them a rough estimate of how many products they will need to manufacture to break even. Companies then compare these results with product sales projections and decide whether it’s worth manufacturing.

## 📝 CVP Analysis Research Paper Examples

1. Dynamic Audio Teaching Ltd.: Business Plan
Business essay sample: The Dynamic Audio Teaching projects development was devised to rectify current problems and constructed with industry collaboration.
Business essay sample: Pure Business is a proposed company to be established in Syria which will be responsible for marketing, advertising and research.
3. Why Will a Firm Continue Business When It Is Making Zero Economic Profits?
Business essay sample: The goal of the firm is to maximize economic profits, and the firm is expected to try to make the positive difference between total revenues and total costs as large as it can.
4. Merritt Hookah Lounge: Market Plan
Business essay sample: The plan entails market research with reference to competitors and consumers as the key market elements, SWOT analysis, key success factors, and the critical issues are analyzed.
5. Marketing Plan For Secondbite Organization
Business essay sample: Secondbite is a non-profit organization that relies on volunteers and well-wishers to donate fresh foods so that it can be able to distribute to the hungry masses.
6. Final Guillermo Furniture Store Scenario
Business essay sample: Analyzing the cost relationships and behaviors, the managers of Guillermo Store are able to identify the cost drivers with the competitors entering the market.
7. Marketing Plan for the FlaBlaster Product
Business essay sample: This is a document about FlaBlaster, a product that is able to reduce the weight of a person without using other weight loss procedures such as surgery.
8. Management and Accounting Principles in Business
Business essay sample: Management and accounting principles are significant and innovative tools that can be used to boost management efficiency and effectiveness in times of business uncertainty.
9. Wonder Co.: The CVP Analysis
Business essay sample: CVP analysis helps to identify the optimal proportions between cost and volume of sales, which allows Wonder Co. to determine the volume of sales for each specific situation.
10. Contribution Margin: Wonder Co. Case
Business essay sample: The pricing strategy and pricing principles that would allow the firm to meet its objectives effectively are being developed in parallel.
11. Shuzworld: Assessment of Plant Operations
Business essay sample: The purpose of this assessment is to recommend the best method to be used by Shuzworld in sneaker’s manufacture, to develop a sales volume forecast.
12. The Financial Analysis of Coca-Cola
Business essay sample: The financial analysis of Coca-Cola is performed in this section, which focuses on the company’s financial performance and its stock price movements in the last five years.
13. Price Elasticity of Demand
Business essay sample: One function of the market is to find an equilibrium price that balances supply and demand for Software and services.
14. Marketing Plan for iGluco in China
Business essay sample: MediCorp has introduced a non-invasive blood sugar testing device called iGluco that is easily attached to a patient’s arm to relay blood sugar levels periodically.
Business essay sample: Quentech Limited, through the Quentech smartwatch, provides a clinical application of a smartwatch as an assistive device in this fast-growing market.
16. Saudi Basic Industries Corporation Annual Report Analysis
Business essay sample: This thorough paper review of financial statements for the last three years beginning the year 2005 up to 2007 of Saudi Basic industries corporation.
17. Performance Analysis of Samba Financial Group
Business essay sample: The study evaluates the financial performance of Samba over a period of three years, keeping in view that the bank invests in staff and maximize the wealth of shareholders.

## 💡 Essay Ideas on CVP Analysis

1. Performance Evaluation of Saudi Industrial Investment Group
Business essay sample: The paper analysis a general financial evaluation and should not be construed as an investigation of forensic nature.
2. Performance Analysis of Almarai Company
Business essay sample: The study is undertaken to evaluate the performance of Almarai Company over the years. Almarai is a company in the food industry. The company was established in 1976.
3. Analysis of Saudi British Bank
Business essay sample: The report focuses on break-even, ratio analysis, performance in the market and other historical data which will assist comes up with strategies for analyzing the companies.
4. Saudi Arabia Fertilizer Company
Business essay sample: Saudi Arabia Fertilizer Company is one of the largest corporations in Saudi Arabia which is in the business of manufacture and distributing fertilizer, oil, and gas.
5. Bagpuss Import Ltd: Company Analysis
Business essay sample: Bagpuss Import Ltd, a company that is in the business of wholesale of a new brand of ginger ale which is imported from New Zealand for distribution in Australia.
6. Use of Managerial Accounting in Planning and Control
Business essay sample: Different products require different quantities of materials and labor; some products may require higher quantities of raw materials, while others may require more labor time.
7. Differences Between Financial and Management Accounting
Business essay sample: There a number of differences between financial and managerial accounting, first of all, management accounts are used internally by the management of the organization.
8. Case Study in Managerial Accounting: Apple Inc
9. Roger Clinic Company Analysis
Business essay sample: The purpose of this document is to describe the case study of Roger Clinic, its financial issues, and its relationships with patients.
10. Variable and Fixed Costs in Managerial Accounting
Business essay sample: Financial accounting provides information to external users such as shareholders, financial providers, regulators, and tax authorities, thus is available to the public.
11. Business Conferences Plc Project Assessment
Business essay sample: The objective of the following report is to estimate the viability of the new conference by Business Conferences Plc.
12. Management Accounting and Decision-Making
Business essay sample: The current paper discusses decision-making in organizations while focusing on accounting management principles.
13. Pringly Division Company's Management Accounting
Business essay sample: The case of Pringly Division presents a management decision that managers have to face in their strategic planning roles.
14. Fly Ash Brick Project: Feasibility Study
Business essay sample: The purpose of this paper is to draw up a fly ash brick fabrication project and provide a feasibility study using cost-volume-profit analysis.
15. New Footwear Product – Tarco Footwear Company
Business essay sample: The product meets the needs of all age groups, as well as genders; hence, has enormous potential in the footwear market. The business venture has an excellent indicator of a successful future.
16. Cost-Volume-Profit (CVP) Analysis
Business essay sample: After the manufacture of products or provision of services, business leaders should ensure that the price quoted for the product covers costs related to the product/service.
17. Investment Appraisal and Sources of Finance
Business essay sample: The paper discusses that Madison PLC should invest in the Madison Supper because it yields higher returns as shown by the results of NPV and IRR.

## 👍 Good CVP Analysis Essay Examples to Write about

1. Pampers Health Spa: Financial Management
Business essay sample: As informed, Pampers Health Spa (PHS), located 10 miles from Birmingham city, is engaged in the luxury spa and hotel business.
2. HAYLO Hair Products Company Analysis
Business essay sample: The purpose of this paper is to give an analysis of HAYLO Hair Products, Inc and ​established that the new hair product would compete well within the hair care products industry.
Business essay sample: CVP is based on particular data and needs great attention as it only offers approximation rather than actual. CVP is based on a number of assumptions.
4. Baric Footwear Limited: New Footwear Product
Business essay sample: New product launches require that realistic cost and revenue assumptions are made to attract potential investors who will fund the project.
5. Management Accounting Concepts in Decision-Making
Business essay sample: This paper explores how management accounting helps in the decision-making process by investigating costing and its antecedents as critical tools in the decision-making process.
6. Financial Reporting Case: JB Hi-Fi Ltd
Business essay sample: The retail company JB Hi-Fi Ltd’s financial ratios are stable and this corroborates the earlier view that the retail company is considered as the best.
7. Cost Behavior and Cost-Volume-Profit Business Analysis
Business essay sample: The author uses the cost-volume-profit model to explain how businesses can increase their prices during the recession period.
Business essay sample: Key Business is a proposed company that is to be based in the UK. It is intended to specialize in research, marketing, and advertising.
9. Arabic Coffee or Arabic Restaurant in United State
Business essay sample: This is a strategic marketing plan which will provide a general overview of the Arabic coffee or Restaurant in the USA.
10. GlaxoSmithKline Firm's Business Growth Opportunity
Business essay sample: The report assesses a growth opportunity for GlaxoSmithKline (GSK) to take advantage of the situation with AstraZeneca's vaccine being called off in several European countries.
11. Maxway Company’s Financial Performance in 2019-20
Business essay sample: This paper aims to outline the financial ratios computed from Maxway company’s financial statements for 2019 and 2020.
12. JP Barber Shop’s Business Plan
Business essay sample: The examination assists JPs with understanding the measure of deal income for overall gain to take care of all expenses.
13. The Medical Equipment Manufacturing Firm: Business Plan
Business essay sample: A detailed business plan in starting medical sports equipment which will be used by our target market to keep physically fit as well as rehabilitate injuries.
14. Financial Analysis of Decision Concerning Party
Business essay sample: This paper provides a financial analysis of the decision concerning the party considering ticket sales price, estimation of major expenses, and potential revenue for the party.
15. Basketball Shoe Manufacturing Company: Cost Behavior & Budgeting
Business essay sample: This assignment evaluates a basketball shoe manufacturing company. The company is currently able to sell an average of 1,000 shoe pairs every month at \$100 per piece.
16. The M Industries Company's Evaluation
Business essay sample: I chose to analyze M industries which is a manufacturing company located in India. The company deals with metal activities such as mining and refining.
17. Virtual Wardrobe Application: Special Pricing for the Markets and Customers
Business essay sample: Your outfit planner is a virtual closet app that helps individuals get more out of their clothes. The majority of virtual fitting rooms use increased reality.

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