Question

What is cvp analysis of Indian oil corporation?

Answer 1

ANS:

CVP analysis of indian oil corporation:

CVP( cost volume profit) analysis is a method of cost accounting . that looks at the impact that varying levels of costs and volume have an operating profit .the cvp analysis also commonly known as break even analysis,looks to determine the break even point for sales volume and cost structures ,

which can be useful for managers making short term economics decisions

the CVP analysis makes several assumptions including that sale price, fixed cost,and variable cost per unit is constant

FORMULA: Fixed cost / contribution margin

to use above formula to find indian oil corporation target sales volume,simply add a target profit amount per unit to the fixed cost component of the formula