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Cost volume profit analysis
Meaning and definition
Cost volume profit analysis is a technique for studying the relationship between cost volume and profits . profits of an undertaking depend upon a large number of factors. But the most important of these factor are the cost of manufacture volume of sales and the selling prices of the products.
In the words of herman c . heiser the most significant single factor in profit planning of the average business is the relationship between the volume of business costs and profit . the CVP relationship is an important tool used for the profit planning of a business .
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One of the significant elements of credit management is the assessment of the credit risk of the customer. As assessing risk two kind of errors arise that are as follows. Type
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Characteristics of irrelevant costs
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The firm's require holding cash may be attributed to the three motives specified below: The transaction motive The precautionary motive The speculative motive.
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