SCENERIO: Your are an IT Project Proposal Manager. You have to sell your project to the senior funding management. You have been directed to use only 1 form of analysis to justify your costs. As you...

Cost-Volume-Profit Analysis: Cost volume profit analysis is used to determine, the impact of costs and volume on operating and net income of
the company. Major assumptions are that, the costs are classified in terms of fixed or variable. Sale price and variable price remain constant
though there is a change in volume.
Break-even Analysis: A level where the revenue earned and the cost incurred are one and the same. Hence it's a no gain no loss point. Every
manager is concerned about the Break – Even point and plans to sell the minimum number of units to be sold to reach the breakeven point.
Contribution Margin: Contribution margin is arrived at by deducting variable cost of revenue.
Comparing CVP, BEs And CM
Sl.
No
Cost-Volume-Profit Analysis (CVP) Break-Even Analysis (BE) Contribution Margin Analysis (CM)
1 A study on the impact of the output
volume towards revenue generation cost
and profit.
A study on the concept of no gains no loss
position (Indvestopedia, 2013) . Break-Even
Point (BEP) is a stage where revenue
generated and cost incurred is same.
A study on the excess of...