ACC 220 cost__volume_and_profit_formulas

Apr 16th, 2015
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Running head: COST, VOLUME AND PROFIT FORMULASCost, Volume and Profit FormulasStudent Name College NameCost, Volume and Profit FormulasThe CVP Analysis or (Cost-Volume-Profit Analysis) is best described as a tool used for determining the changes in cost and volume and how that affects the net income and operating income of the company. The components of the CVP are the volume or level of activity, the units selling price, the variable cost per unit, the total fixed cost for the company, and the sales mix, that is if the company sales more than one item (Thakkar, Finley, & Liao, 1984, p. 1). The volume or level of activity is the amount of sales the company has for any given period. If in period 5 they had a record breaking period and sold 50,000 units and then in period 6 they dropped down to 30,000 units this would be the level of activity.The unit selling price is just what it sounds like, the price the company has decided on to sell the product. If they decide on $25 than this is what the unit selling price would be.The variable cost per unit are those cost that stay fixed on a per unit basis but actually change depending on the level of activity. So now we

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