Cost Volume Profit Analysis

Description

Break-even analysis involves the analysis of cost-volume-profit relationships of products and services in order to make operating decisions to which the break-even point is critical as the benchmark for determining the profitability of the product/service.  This assessments focus on the ability of the candidate to apply the principles of break-even analysis with specific reference to:

• understanding the concept of break-even analysis as a management tool
• understanding the calculation and interpretation of the break-even point
• applying the break-even point to make operating decisions
• calculating break-even points for multiple products without constraints
• preparing a production plan with a single operating constraint