breakeven analysis


breakeven analysis
= cost-volume-profit analysis; CVP analysis
The technique used in management accounting in which costs are analysed according to cost behaviour characteristics into fixed costs and variable costs and compared to sales revenue in order to determine the level of sales volume, sales value, or production at which the business makes neither a profit nor a loss (see breakeven point). The technique is also used in decision making to assist management to determine such questions as the profit or loss likely to arise from any given level of production or sales, the impact on profitability of changes in the fixed or variable costs, and the levels of activity required to generate a desired profit. Breakeven analysis may either be carried out by drawing a breakeven chart or by calculation. For example, the formula for determining the level of activity required to generate a desired profit is:
(total fixed costs + desired level of profit)-contribution per unit of production. See also contribution

Big dictionary of business and management. 2014.

Look at other dictionaries:

  • breakeven analysis — cost volume profit analysis; = CVP analysis The technique used in management accounting in which costs are analysed according to cost behaviour characteristics into fixed costs and variable costs and compared to sales revenue in order to… …   Accounting dictionary

  • breakeven analysis — /breɪk i:v(ə)n əˌnæləsɪs/ noun 1. the analysis of fixed and variable costs and sales that determines at what level of production the breakeven point will be reached ● The breakeven analysis showed that the company will only break even if it sells …   Marketing dictionary in english

  • Безубыточности анализ (BREAKEVEN ANALYSIS)  — Анализ результатов деятельности предприятия на основе соотношения объемов производства, прибыли и затрат, позволяющий определить взаимосвязи между издержками и доходами при разных объемах производства. Его особенность заключается в том, что он… …   Словарь терминов по управленческому учету

  • breakeven chart — breakeven graph A graph on which an organization s total costs, analysed into fixed costs and variable costs, are drawn over a given range of activity, together with the sales revenue for the same range of activity. The point at which the sales… …   Accounting dictionary

  • breakeven chart — breakeven graph A graph on which an organization s total costs, analysed into fixed costs and variable costs, are drawn over a given range of activity, together with the sales revenue for the same range of activity. The point at which the sales… …   Big dictionary of business and management

  • Cost-Volume-Profit Analysis — Cost Volume profit (CVP), in managerial economics is a form of cost accounting. It is a simplified model, useful for elementary instruction and for short run decisions. Cost volume profit (CVP) analysis expands the use of information provided by… …   Wikipedia

  • cost-volume-profit analysis — See: breakeven analysis …   Accounting dictionary

  • CVP analysis — See: breakeven analysis …   Accounting dictionary

  • Break even analysis — The break even point for a product is the point where total revenue received equals the total costs associated with the sale of the product (TR=TC). [Horngren, C.,Sundem, G Stratton, W. Introduction to Management Accounting (2002) Prentice Hall]… …   Wikipedia

  • CVP analysis — CVP stands for Cost Volume Profit. The CVP analysis is a financial decision making aid used to determine the level of output used to achieve any target profit level or the financial impact of basic business activities like changes in costs or… …   Wikipedia