• used to determine how changes in costs and volume affect a
company's operating income and net income.
Elements of CVP Analysis:
• Sales ( Selling Price/Unit Volume) • Total Fixed Cost • Variable Cost per Unit • Sales mix Variable Costing Income Statement Formulas • Break Even Point Analysis Profit = 0 Sales = Variable cost + Fixed Cost Contribution Margin = Fixed Cost Therefore: Break Even Point in Units = Fixed Cost/Contribution Margin per unit
Break Even Point in Pesos = Fixed Cost/Contribution Margin Ratio