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Level 4 Diploma in Accounting and Business

Applications and Limitations of CVP Analysis

AB405 · Management Accounting — Week 11 of 16

CourseAB405
Week11 of 16
SemesterII
TutorOnline in the course chat

This week’s topics

Applications and Limitations of CVP Analysis

  1. Multi-product break-even analysis
  2. Graphical representation of cost-volume-profit
  3. Short-term decision-making and product mix choices
  4. Underlying assumptions and real-world limitations of break-even analysis
  5. Multiproduct Break Even Analysis

What you will be able to do

  • 4.2 Explain how a business organisation can apply cost, volume and profit analysis.
  • 4.3 Explain the limitations of break-even analysis.

Activity

Start with this week’s video, then: Seminar, guided reading and a short written task: explain how a business organisation can apply cost, volume and profit analysis.

Study materials

Videos

  • Multiproduct Break Even Analysis · YouTube · Edspira · 6 min · for registered students
  • Cost Volume Profit Analysis (CVP): Target Profit · YouTube · Edspira · 7 min · for registered students
  • Cost Volume Profit (CVP) Analysis: Target After Tax Profit · YouTube · Edspira · 5 min · for registered students
  • Intro to Cost Volume Profit Analysis · YouTube · Edspira · 13 min · for registered students
  • Cost Volume Profit Analysis (CVP): calculating the Break Even Point · YouTube · Edspira · 7 min · for registered students

Further resources

  • Principles of Accounting, Volume 2: Managerial Accounting, ch. 3: Cost-Volume-Profit Analysis · PDF · OpenStax, textbook chapter; pp. 129–180 · for registered students
  • Managerial Accounting, ch. 6: How Is Cost-Volume-Profit Analysis Used for Decision Making? · PDF · Saylor Academy, textbook chapter; pp. 313–382 · for registered students
  • Optimizing costs for gamma knife radiosurgery: a cost and breakeven analysis · Reading · Reading, article · for registered students
Materials marked “for registered students” open in the student portal, which is set up as soon as you receive final acceptance.
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Admitted students ask questions on this week’s page in the student portal: an AI assistant trained on the course answers first, and during the course’s timetabled classes Connect to your tutor brings your tutor into the chat, who may start a call if needed.

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Course plan
  • Week 1: Introduction to Management Accounting
  • Week 2: Cost Accounting and Accounting Integration
  • Week 3: Budgetary Planning and Control
  • Week 4: Working Capital Management
  • Week 5: Non-Current Assets and Depreciation
  • Week 6: Principles of Standard Costing
  • Week 7: Variance Analysis Calculations
  • Midterm: Midterm evaluation
  • Week 9: Evaluation of Standard Costing
  • Week 10: Break-Even and Cost-Volume-Profit Fundamentals
  • Week 11: Applications and Limitations of CVP Analysis
  • Week 12: Applying Management Accounting in practice: case studies
  • Week 13: Assignment workshop: research, planning and referencing
  • Week 14: Assignment workshop: drafting, feedback and improvement
  • Week 15: Review and coursework completion
  • Final: Final assessment and submission
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