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Using Price-Volume-Cost (PVC) & Breakeven Analysis, this course explains how to understand the results of changes in pricing, volumes, and costs on financial performance and profitability.

Cost-volume-profit (CVP) analysis helps managers understand the interrelationships among cost, volume, and profit by focusing their attention on the interactions among the prices of products, volume of activity, per unit variable costs, total fixed costs, and mix of products sold. It is a vital tool used in many business decisions such as:

  • Deciding what products to manufacture or sell,
  • What pricing policy to follow,
  • What marketing strategy to employ, and
  • What type of productive facilities to acquire.

Learning Objectives

  • Explain how changes in activity affect contribution margin and net operating income
  • Use the contribution margin ratio (CM ratio) to compute changes in contribution margin and net operating income resulting from changes in sales volume
  • Show the effects on net operating income of changes in variable costs, fixed costs, selling price, and volume
  • Determine the level of sales needed to achieve a desired target profit
  • Determine the break-even point
  • Be able to apply PVC Analysis to a range of typical business situations
Last updated/reviewed: June 19, 2018

26 Reviews (71 ratings)Reviews

5
Member's Profile
The trick is to know the per unit costs as exactly as this. Most financial people talk GAAP costs per unit and refrain from doing otherwise. All finance staffs for mfg companies should consider this training as mandatory
5
Anonymous Author
I liked how to instructor presented the information, it was simple yet hit on all the points clearly and effectively. I really liked the sample worksheet that was provided. I believe it will be useful in the future
3
Member's Profile
It’s pretty basic for a management accounting class. Good review for those not typically doing this type of analysis. It was good that the instructor approached breakeven from two different approaches.
4
Member's Profile
Would have liked seeing formulas as they might have been set up in an Excel worksheet for better understanding of values used instead of having the numbers embedded in the Excel workbook provided.
5
Member's Profile
Good foundational course in cost-volume-profit & breakeven analysis. Presenter was effective in providing definitions of keys terms, equations, and multiple examples to illustrate key topic points.
4
Anonymous Author
Great course. I loved the various examples used throughout the course. Peter did a great job explaining the interrelationships among cost, volume, and profit.
3
Member's Profile
I think the material was good, but all of the presentation was fundamentally behind one single equation and possibly multiple representations of the same.
5
Anonymous Author
A great revision of the important topic. Nicely presented and explained. I like the course. More practice questions would help better to understand.
4
Anonymous Author
Course is well presented and explained but may be too basic for anyone with a business degree or that has taken a cost accounting course.
5
Anonymous Author
This class explained clearly with many examples and different scenarios how to use and the benefits of Cost-Volume-Profit Analysis
3
Anonymous Author
Missing one slide in presentation. Some of the calculations were not exactly like the presentation.
5
Member's Profile
Very easy to follow. Excellent for Corporate Accounting and Finance or Consulting.
5
Member's Profile
Nice course, very clear for the first approach to CVP and Break-even analysis
4
Member's Profile
Material slightly repetitious when trying to highlight the calculations.
5
Member's Profile
A very good introduction to Cost-Volume-Profit and Break-even analysis.
5
Member's Profile
Very good course. Good examples which clearly explained the concepts.
4
Anonymous Author
Certainly an applaudable course allowing a quick review of the topic.
4
Member's Profile
Very basic; good for beginners, as these are important concepts.
5
Member's Profile
I like the fact that he had an Excel spreadsheet available.
5
Member's Profile
Good course. Maybe a little basic for experienced users.
5
Anonymous Author
Good course to review the basics.
5
Anonymous Author
Interesting and practical course
5
Anonymous Author
Very good course.
5
Member's Profile
Nice course!
5
Anonymous Author
Good point
4
Anonymous Author
Thanks

Prerequisites

Course Complexity: Foundational

A general understanding of basic accounting methods. Knowledge of cost accounting will be helpful.

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .

1 QuestionCourse Questions and Answers

User picture

Rather basic course good for beginners, would like to see more application in excel and different variations - ie sales force contribution calculations, etc

Course Syllabus
INTRODUCTION AND OVERVIEW
Cost-Volume-Profit & Breakeven Analysis
  10:37The Contribution Approach and CVP Relationships
  4:48Contribution Margin Ratio
  13:38Effect of Changes in Selling Price, Variable Costs, Fixed Costs, and Volume
  6:22Breakeven Analysis
  13:21Desired Target Profit and Course Summary
SUPPORTING MATERIALS
  PDFSlides: Cost-Volume-Profit & Breakeven Analysis
  PDFCost-Volume-Profit & Breakeven Analysis Glossary/Index
  xlsxCVP Worksheet
REVIEW & TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM