What is the cost-volume-profit analysis method?

Volume-cost-profit analysis (CVP analysis for short) and cost-profit analysis (cost-profit analysis for short), also known as output cost-profit analysis, also known as break-even analysis or break-even analysis, is to grasp the change law of profit and loss by analyzing the relationship between production cost, sales profit and product quantity, and guide enterprises to choose business plans that can produce the most products at the lowest cost and make them get the maximum profit.

Cost-volume-profit analysis includes critical point analysis of profit and loss, change analysis of various factors and sensitivity analysis. Introduce several concepts. Contribution gross profit is also called marginal contribution. Marginal profit refers to the balance of net sales minus variable costs. Variable cost refers to the sum of variable manufacturing cost, variable sales cost and variable management cost; Unit contribution rate, calculated according to the ratio of contribution gross profit to sales volume; Gross contribution margin is equal to the sales price of unit marginal contribution divided by unit product.