PMF5

Syllabus C2. Cost Volume Profit Analysis 3 / 7

a) Explain the nature of CVP analysis.
b) Calculate and interpret the break- even point and margin of safety.
c) Calculate the contribution to sales ratio, in single and multi-product situations, and demonstrate an understanding of its use.
d) Calculate target profit or revenue in single and multi-product situations, and demonstrate an understanding of its use.
e) Interpret break even charts and profit volume charts and interpret the information contained within each, including multi-product situations.
f) Discuss the limitations of CVP analysis for planning and decision making.
Cost Volume Profit Analysis