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What is the basic C-V-P equation?

Updated: 12/10/2022
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Sales revenue - Variable costs - Fixed costs = Profit

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Q: What is the basic C-V-P equation?
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How do you establish no of turns in both high voltage and low voltage windings of a 3 phase transformer?

Through the use of the basic transformer voltage equation.


What are the limiting assumptions of C-V-P analysis?

I am interpreting the question as above as Cost Volume Profit(CVP) analysis. If this is not so, my answer below will not be correct. First of all, CVP is used in Finance or Accounting, to describe the behaviour of cost, revenue and profit. Other disciplines also use this analysis, and will be called a different name. In Business Management, it's often called Break Even Analysis. One of limiting assumptions of CVP analysis is the assumption of a linear function of the variable cost and total cost. This means that the cost of a business will increase in a proportional manner, if I make 2 units of output, the cost is 4, if I make 4 units of output, the cost is 8. While this may be possible in theory, it reality, it's not so. If we assume that the cost is linear, the Variable Cost and the Total Cost will be a straight line. In reality, the variable cost doesn't increase in along a straight line. ( not so perfect in reality ). Apart from that, the CVP analysis also assumes that there are no stocks present. The analysis just shows that goods are sold and the company has no stocks kept. Although these can be seen as a limiting assumptions of the CVP analysis, it's important to understand it provides an understanding to students who are new to it. In Economics, the CVP analysis is more complicated, with the variable cost and the total cost function a curve. This means that the cost will fall initially and then increase later. Apart from that in other Ecnomics, costs are considered with the short run and long run perspective. Costs may not be the same in short run and long run.


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Related questions

How do you extract blood from cvp line?

hou to extract blood from cvp line


Compare marginal costing versus cvp analysis?

CVP stands for Cost-Volume-Profit.


How CVP analysis is used in managerial accounting decision making?

Cost-Volume-Profit (CVP) Analysis considers the impact that changes in output have on revenue, costs, and net income. In applying CVP Analysis, costs are separated into variable and fixed costs. This distinction is important because, as mentioned previously, variable costs change with changes in output, whereas fixed costs remain constant throughout what is referred to as a relevant range. CVP analysis is based on the following equation: Profit = Total Revenues - Total variable costs - Total fixed costs


How much saline to push after blood extraction cvp line?

how much saline to push after bood taking from cvp line


Basic break-even and CVP models are subject to limiting assumptions?

Yes, basic break-even and cost-volume-profit (CVP) models assume a constant sales price, fixed costs, and linear relationships between costs, volume, and profits. They also do not account for factors like seasonality, changes in pricing strategies, or complexities in cost structures, leading to limitations in their application to real-world scenarios.


What assumptions about costs are made in CVP?

Although no one can be certain that costs are linear over the entire range of output or production, this is an assumption of CVP.


What is the effect systemic vascular resistance has on arterial pressure?

System vascular resistance (SVR) is equal to the difference of mean arterial pressure (MAP) and central venous pressure (CVP) divided by cardiac output (CO) or in equation form SVR=(MAP-CVP)/CO. So, increasing SVR will increase arterial pressure unless the CO drops.


What does CVP monitor?

Central Venous Pressure


What is cvp packaging?

Controlled Vacuum Packaging


What is the basic rule in solving an equation?

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Can you transduce cvp with dual lumen picc?

proximal port


What is the normal rate for CVP?

8-12cmH2O