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Analysis of cost data technique:

CVP ANALYSIS OR COST VOLUME PROFIT ANALYSIS
CVP a name itself explains that it is an analysis of Cost with reference to sales volume and profit (i.e. how much change is occurred in profit with due to cost and volume).

CVP is an analysis that determines the company about the profitability by defining the cost-effective combination of costs (fixed cost and variable cost) and sales volume and price.

(John Freedman, 2015)

The basic formula for this relationship is:

CVP OR PROFIT=REVENUE-VARIABLE COST-FIXED COST

CVP OR PROFIT=CONTRIBUTION MARGIN -FIXED COST
CVP is actually analysis the cost data in a way that what more profitable combination of variable cost and fixed cost. Sometimes, profit increases by reducing the fixed cost or sometimes by reducing CM.
In CVP analysis we adopt the following assumptions:

SALES PRICE: Constant sales price; VARIABLE COST: Constant variable cost per unit; FIXED COST: Constant total fixed cost; VOLUME: Units sold equal units produced. (Matz & Usry)

With the help of CVP a company can easily determine the best cost structure I.e. a cost structure that produce higher profit or minimize expense/cost and if required so a company can trade-off between the proportion of fixed cost and variable cost.
Break-even is a subset of CVP analysis (in the next section we will discuss break even) that determine the level of company’s operation where company’s’ earn no profit or loss with the calculate cost structure while CVP analysis determine the level of activity where a company earns a profit with some determine cost structure. CVP analysis is actually a marginal analysis that runs under specified assumptions in a short run.

BREAK EVEN ANALYSIS
Break even analysis is one of the data analysis techniques in which:

A company is analyzes the cost of the sales (i.e.

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