Accounting Question

How can CVP analysis be used to predict future costs and profitability? Describe how CVP analysis is used, or could be used, at your current place of employment. If you have not worked for a company that might use CVP analysis, you may choose a well-known company and describe how you envision that company using CVP analysis. Try to discuss a concept associated with CVP not already addressed by your classmates. Consider using an article to summarize or apply the CVP concepts. To participate in follow-up discussion, choose one of the topics/concepts that a classmate has posted and provide your own reaction to it, adding to what they posted or providing a professional disagreement to their posting.

Please include proper citations in your discussion post. Points will be deducted if proper citations are not used.Submitted on:Feb 15, 2024, 7:38 PMVIEW DQ RESPONSEBHBrittnee HughesFeb 15, 2024, 7:44 PM(edited)UnreadGood evening,Analysis of cost, volume, and profit is essential to a business. It’s crucial for profit planning as well. The study of how variations in cost and volume affect a company’s earnings is known as cost-volume-profit, or CVP, analysis. Additionally, it’s a consideration when management chooses how best to employ manufacturing facilities, choose the product mix, and set selling prices. A CVP analysis consists of five elements: activity level, unit selling price, variable cost per unit, total fixed costs, and sales mix. The connections between these elements are taken into account in the CVP analysis. Gaining a deeper comprehension of these elements will lay the groundwork for comprehending the operation of the CVP analysis.It would be fascinating to examine how an educational institution might use CVP analysis because I have some close friends that work in the education system. Using the Alex Charter School as an example, we can see that its owner, Bill Jensen, made an effort to uphold academic excellence while remaining financially stable. Tuition from students provides the majority of the school’s funding. The case study examined various aspects of the school, including the contribution margin and fixed and variable costs. A manager may make better bids and, eventually, better business decisions by understanding which costs are fixed and which are changeable (Johnson & Kiani, 2010).While variable costs included the additional cost per student for after-school programs and other school activities, fixed costs included rent and instructor salaries. Despite the fact that the charter only currently has 195 pupils, the CVP study revealed that in order for the school to accomplish it needs to enroll 109 more students, or 304 overall, in order to reach its break-even point. References:Johnson, G., & Kiani, R. (2010). Case Study: Alex charter school. Journal of Business Case Studies (JBCS),6(4), 53-58. doi:10.19030/jbcs.v6i4.890 https://doi.org/10.19030/jbcs.v6i4.890REPLY