even point. Examining shifts in cost and volume and the resulting eff ects on profi ts is called...

even point. Examining shifts in cost and volume and the resulting eff ects on profi ts is called cost-volume-profi t (CVP) analysis. CVP analysis can be used to calculate the sales volume necessary to achieve a target profi t, stated as either a fi xed or variable amount on a before- or after-tax basis. Managers use CVP analysis to eff ectively plan and control by concentrating on the relationships among revenues, cost, volume changes, taxes, and profi t. Th e CVP model can be expressed mathematically or graphically. Th e CVP model considers all costs, regardless of whether they are product, period, variable, or fi xed. Th e analysis is