Cost Volume Profit
Cost Volume Profit (CVP) analysis is a financial management tool used to examine the relationship between costs, sales volume, and profits. It helps businesses understand how changes in production levels, pricing strategies, and cost structures affect their overall profitability. CVP analysis typically involves calculating breakeven points, determining the optimal pricing strategy, and evaluating the impact of cost reductions on profitability. By using CVP analysis, businesses can make informed decisions to maximize profits and improve financial performance.