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.

🔝 Top-10 Examples of CVP Analysis

1. Business Planning Process and Enterprise
2. Mobily Company: Marketing Strategy Plan
3. Starbucks Saudi Arabia: Marketing Strategic Plan
4. Automotive Fun and Service Company: Business Plan
5. Target Corporation Marketing Plan for Clothing
6. AFDCO Incorporation: Business Plan
7. Nelson & Prada Company's New Product Launch
8. Paper Works Company's Project Financing
9. Notes Restore: Business Plan Proposal
10. Florist Boutique + Café: Business Plan

📊 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.
2. "Pure Business" Company Business Plan
   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?
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4. Merritt Hookah Lounge: Market Plan
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5. Marketing Plan For Secondbite Organization
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6. Final Guillermo Furniture Store Scenario
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7. Marketing Plan for the FlaBlaster Product
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8. Management and Accounting Principles in Business
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9. Wonder Co.: The CVP Analysis
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10. Contribution Margin: Wonder Co. Case
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11. Shuzworld: Assessment of Plant Operations
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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
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14. Marketing Plan for iGluco in China
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15. Quentech Limited's Business Plan
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16. Saudi Basic Industries Corporation Annual Report Analysis
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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
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5. Bagpuss Import Ltd: Company Analysis
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6. Use of Managerial Accounting in Planning and Control
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7. Differences Between Financial and Management Accounting
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8. Case Study in Managerial Accounting: Apple Inc
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9. Roger Clinic Company Analysis
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10. Variable and Fixed Costs in Managerial Accounting
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11. Business Conferences Plc Project Assessment
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12. Management Accounting and Decision-Making
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13. Pringly Division Company's Management Accounting
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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
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👍 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
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3. Advantages and Disadvantages of Cost-Volume-Profit Analysis
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4. Baric Footwear Limited: New Footwear Product
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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.
8. Business Plan For a Proposed Company Key Business
   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
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10. GlaxoSmithKline Firm's Business Growth Opportunity
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11. Maxway Company’s Financial Performance in 2019-20
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12. JP Barber Shop’s Business Plan
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13. The Medical Equipment Manufacturing Firm: Business Plan
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14. Financial Analysis of Decision Concerning Party
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15. Basketball Shoe Manufacturing Company: Cost Behavior & Budgeting
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16. The M Industries Company's Evaluation
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17. Virtual Wardrobe Application: Special Pricing for the Markets and Customers
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