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Cost-volume-profit analysis

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Management and Cost Accounting

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Abstract

After studying this chapter, you should be able to:

  • describe the differences between the accountants’ and the economists’ model of cost—volume—profit analysis;

  • justify the use of linear cost and revenue functions in the accountants’ model;

  • apply the mathematical approach to answer questions similar to those listed on pages 213 and 214 in respect of Exhibit 9.1;

  • construct break-even, contribution and profit—volume graphs;

  • identify and explain the assumptions on which cost—volume—profit analysis is based;

  • calculate break-even points for multi-product situations.

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References and Further Reading

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  • Broster, E.J. (1971) The role of price elasticity of demand in profit planning, Journal of Business Finance, Autumn, 18–27.

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  • Gambling, T.E. (1965) Some observations on break-even budgeting and programming to goals, Journal of Accounting Research 3(1), Spring, 159–65.

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Author information

Authors and Affiliations

  1. Huddersfield Polytechnic, UK

    Colin Drury (Reader in Accountancy and Finance)

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  1. Colin Drury
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© 1992 J.C. Drury

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Drury, C. (1992). Cost-volume-profit analysis. In: Management and Cost Accounting. Springer, Boston, MA. https://doi.org/10.1007/978-1-4899-6828-9_9

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  • DOI: https://doi.org/10.1007/978-1-4899-6828-9_9

  • Publisher Name: Springer, Boston, MA

  • Print ISBN: 978-0-412-46390-7

  • Online ISBN: 978-1-4899-6828-9

  • eBook Packages: Springer Book Archive

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