Cvp what does it mean

Homophones, Homographs, and Homonyms The same, but different. Merriam-Webster's Words of the Week - Nov. Ask the Editors 'Everyday' vs. What Is 'Semantic Bleaching'? How 'literally' can mean "figuratively". Literally How to use a word that literally drives some pe Is Singular 'They' a Better Choice? The awkward case of 'his or her'. Got another good explanation for CVP?

Don't keep it to yourself! Add it HERE! Still can't find the acronym definition you were looking for? Use our Power Search technology to look for more unique definitions from across the web! Search the web. Citation Use the citation options below to add these abbreviations to your bibliography. Powered by CITE. Complete Blood Count. Continuous Blood Circulation. Central Bypass Cost. Central Blood Culture.

Browse Abbreviations. Get instant explanation for any acronym or abbreviation that hits you anywhere on the web! Two clicks install ». Download Close. Central Venous Pressure Medical » Oncology -- and more Rate it:. Cost Volume Profit Business » Accounting -- and more Profit may be added to the fixed costs to perform CVP analysis on the desired outcome.

CVP analysis is only reliable if costs are fixed within a specified production level. All units produced are assumed to be sold, and all fixed costs must be stable in a CVP analysis. Another assumption is all changes in expenses occur because of changes in activity level. Semi-variable expenses must be split between expense classifications using the high-low method , scatter plot, or statistical regression. Cost-volume-profit analysis is used to determine whether there is an economic justification for a product to be manufactured.

A target profit margin is added to the break-even sales volume, which is the number of units that need to be sold in order to cover the costs required to make the product, to arrive at the target sales volume needed to generate the desired profit. The decision-maker could then compare the product's sales projections to the target sales volume to see if it is worth manufacturing the product.

The reliability of CVP lies in the assumptions it makes, including that the sales price and the fixed and variable cost per unit are constant. The costs are fixed within a specified production level. All units produced are assumed to be sold, and all fixed costs must be stable. Semi-variable expenses must be split between expense classifications using the high-low method, scatter plot, or statistical regression. The contribution margin can be stated on a gross or per-unit basis. Basically, it shows the portion of sales that helps to cover the company's fixed costs.

Any remaining revenue left after covering fixed costs is the profit generated. So, for a business to be profitable, the contribution margin must exceed total fixed costs. Financial Analysis. Investing Essentials. Financial Statements. Actively scan device characteristics for identification.

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