09-08, 2022

本文是會計專業的Essay范例，題目是“Cost-volume-profit Analysis Benefits and Limitations（成本-量-利分析的優點和局限性）”，人們普遍認為，成本-量-利分析最近已經成為一種現象，它不僅用于會計，也用于經濟、金融和制造，因為分析是直接解決公司面臨的一些問題的解決方案。

**ABSTRACT****摘要**

It is widely accepted that Cost-Volume-Profit Analysis has been a phenomenon recently, and it uses in not only accounting but also economics, finance and manufacturing because the analysis is directly addressing to solutions of some problems that a company faces.

The paper intends to display Cost-Volume-Profit Analysis’ starting point is to show the relationship between the cost of goods, the activity’s volume and the profit of the company.

The study of Cost Volume Profit Analysis provides that the importance of Cost Volume Profit Analysis in companies, the requirements of an effective CVP Analysis, and the limitations of the analysis. Besides, the paper designates to prove that although CVP Analysis has some limitations, it is actually a useful resource for a company in terms of decision making, planning and controlling.

**1. INTRODUCTION****介紹**

It is an inevitable fact that resources are scarce, and managers have to handle both the company’s and external resources wisely. Therefore, they can use different systems from diverse disciplines to see how to use their resources. “Cost-Volume-Profit Analysis” is one of the crucial analysis methods in accounting. It helps companies to analyze where they are in terms of cost, how many quantities will they have (volume) and their profit.

資源稀缺是一個不可避免的事實，管理者必須明智地處理公司和外部資源。因此，他們可以使用來自不同學科的不同系統來了解如何使用他們的資源?！俺杀?量-利分析”是會計分析的重要方法之一。它幫助公司分析他們在成本方面的位置，他們將有多少數量(數量)和他們的利潤。

The CVP Analysis can be used to understand how alters in cost and volume influence a company’s operating income and net income. It needs the company’s all costs such as manufacturing, selling and administrative costs, which can be identified as fixed or variable costs. Moreover, CVP examines the relationship between cost, volume (how much quantity sold), and profit. Sometimes, price and revenue can be added to this relationship.

In planning, decision making, and control aspects, CVP analysis plays a critical role, but it is limited to be short-term usage. Therefore, it can be said that it is a weak tool to use.

On the other hand, CVP is a good start for decision making, but in an uncertain environment, it may be challenging because of multiple products, many uncertain elements, and demand. For that reason, if a manager is willing to use CVP Analysis, then s/he should figure out the environment (both internal and external), and the relationship between variables themselves.

2.LITERATURE REVIEW

2.1. Cost Volume Profit Analysis: An Instrument of Managerial Control of The Economic Entities in the Extractive Industry

The article states that the economy has been based on natural resources for the last century. Therefore, it is crucial but hard to evaluate which resources need major concern for companies. In this context, Cost-Volume-Profit Analysis is very effective in the progress of work and a managerial control mechanism in terms of defining the relationship between cost, quantity, and profit. The basis of the method lies in the separation of physical quantity variation in manufacturing and distribution, in variable and fixed costs, while considering only variable expenses for the unit cost of the manufactured article. The article highlights that break-even analysis can be a starting point because it gives an insight about profit and required sales level.

這篇文章指出，上個世紀，經濟一直以自然資源為基礎。因此，評估哪些資源是企業需要重點關注的，這是至關重要的，但也是困難的。在這種背景下，成本-量-利分析在工作過程中是非常有效的，在定義成本、數量和利潤之間的關系方面是一種管理控制機制。該方法的基礎在于分離制造和分銷中的實物數量變動、變動成本和固定成本，而只考慮制造產品單位成本的變動費用。本文強調，盈虧平衡分析可以作為一個起點，因為它提供了關于利潤和所需銷售水平的洞察力。

Moreover, since it can be thought an appropriate case for optimizing profits, it can be used in the calculation of the specific indicators of the direct costing method and the article has been prepared from data.

Additionally, the article looks at the effects on Cost-Volume-Profit Analysis. According to the article, the increase of selling prices, the rise of total fixed costs, the decline in variable costs and the cutback goods’ volume may create the growth of balance point, the loss of coverage factor, the deterioration of safety coefficient and range and at the end, it causes the decline of profit.

It can be assumed that this can be a performance management system for economic entities in this area of activity by using the cost volume profit method. Economic entities remain competitive in an uncertain and highly competitive environment only if they have adequate control management, plan and analyze the cost volume and profit activities of the company. Also, these activities are integrated which means that if a company approaches this analysis strategically, it will gain a competitive advantage.

可以假設，這可以是該領域的經濟實體使用成本-量-利法的績效管理系統。經濟實體在不確定和高度競爭的環境中保持競爭力，只有當他們有足夠的控制管理，計劃和分析公司的成本、數量和利潤活動。此外，這些活動是整合的，這意味著如果一個公司采取戰略分析，它將獲得競爭優勢。

2.2. Cost Volume Profit Analysis Under Uncertainty: A Model with Fuzzy Estimators based on Confidence Intervals

Break Even analysis can clarify a large number of business decisions, often called to as cost-volume-profit analysis. Break Even analysis can generally be utilized in three different ways. It may be needed in decision – making on new products by contributing to the definition of the level of sales of the new product indicated for profit. One of the usages may be in modernization and automation programs that empower the company to replace Variable Costs with Fixed Costs frequently.

However, break-even analysis has some constraints. The break-even analysis considers that It assumes that the total cost of fixed and variable costs can be analyzed. During the analysis, the fixed cost remains the same. Volume is one of the determinants of the variable cost. During the analysis, the product price remains the same. Both profits and costs can be analyzed in terms of volume.

Nevertheless, it cannot be said that this assumption is entirely valid. Particularly, the break-even analysis arranges the company the ability to measure each product’s breakeven point, but it cannot distinguish between the two products. This deficiency is due to the fact that break-even analysis thinks cost and volume as certain variables.

然而，不能說這個假設是完全正確的。特別是，盈虧平衡分析安排公司的能力，以衡量每個產品的盈虧平衡點，但它不能區分兩個產品。這種缺陷是由于盈虧平衡分析認為成本和產量是某些變量。

The article mentions that CVP Analysis may lack uncertainty. As a result, the authors proposed a CVP Analysis with stochastic elements. In other words, they analyzed CVP Analysis with user demand and average cost functions. They built a relationship between the estimated profit and breakeven in general and also in an uncertain environment.

As a result, Fuzzy estimators were applied by the authors in a well-known method (based on profit and risk), which can help a company decide which product to produce and also in an uncertain breakpoint analysis. In other words, we used a new methodology in the traditional break-even analysis to contribute to this research area under uncertain conditions.

2.3. Cost-Volume-Profit Analysis Incorporating the Cost of Capital

The CVP Analysis is a mathematical image of the producer’s economy. The CVP analysis is used to assess the financial consequences of a variety of strategic and operational decisions. It makes more painless to measure the sensitivity of a product to changes in one or more of its underlying parameters. CVP Analysis may be used to regulate the profitability and risk offsets resulting from alternative product design and production options.

Although it is a very effective tool, it has some limitations. CVP Analysis is regularly criticized for utilizing simplifying assumptions like deterministic and linear cost and revenue functions. Furthermore, CVP is degraded by its focus on a single product and its one-time analysis. And sometimes, a company needs more complicated financial analysis. Nonetheless, companies find CVP analysis easy to use and the model can be applied in strategic and long-run planning and decision making.

雖然它是一個非常有效的工具，但它也有一些局限性。CVP分析經常因使用確定性和線性成本和收益函數等簡化假設而受到批評。此外，CVP因專注于單一產品和一次性分析而退化。有時候，公司需要更復雜的財務分析。盡管如此，企業發現CVP分析很容易使用，該模型可以應用于戰略和長期規劃和決策。

Like other methods, CVP analysis uses accounting profitability as the primary decision criteria for assessing resource allocation decisions. CVP analyzes capital costs and treats them as zero. If CVP Analysis fails, then cost of capital may be wrong, and as a result, profitability may be estimated erroneous. In fact, CVP analysis sometimes tends to support managers to select false choices.

CVP analysis is generally carried out with financial data from the accounting system of the company. The financial data required for CVP can be obtained either from a traditional cost accounting system or from a costing system based on the activities. Capital costs are traced to products, such as overhead costs, using the principles of activity-based costing. Unlike overhead costs, the opportunity costs of the funds invested are deducted from the operating income of a product after taxes to measure its economic income. When the economic income of a product over its lifetime is reduced to when production begins, it is equivalent to the NPV of a product. It allows managers to carry out CVP analysis that takes into account the cost of capital used in the production of a proposed product. The CVP model, based on a product’s reduced economic income, allows managers to calculate the sales quantity of a product, measure the profitability of a product over the range of its sales and determine the rate of change in its profitability. The CVP also facilitates the appraisal of trade-offs in alternative investment and cost structures and the estimation of the impact of the process improvement program on the profitability of a product.

The article has proposed a new technique via using an incorporate cost of capital. The CVP model that incorporates capital costs is more complex and more expensive to develop than the traditional CVP. His simplicity is one of the reasons for the conventional CVP analysis. Simplicity, however, is not a desirable feature when it comes to cost systems or management techniques. Managers and managerial accountants must, therefore, consider how the CVP model, which incorporates capital costs, would change their product mix decisions and payoffs concerning the increased cost and complexity of the model.

本文提出了一種利用合并資本成本的新技術。與傳統的CVP模型相比，包含資本成本的CVP模型更加復雜，開發成本也更高。他的簡單性是傳統CVP分析的原因之一。然而，當涉及到成本系統或管理技術時，簡單并不是一個理想的特性。因此，管理人員和管理會計師必須考慮CVP模型，它包含了資本成本，將如何改變他們的產品組合決策和關于增加的成本和模型的復雜性的收益。

2.4. Using Different Probability Distributions for Managerial Accounting Technique: The Cost-Volume-Profit Analysis

Like all financial models, CVP is based on a set of simplifying assumptions that reduce the complexity of variables in input and output to make a decision – making more traceable. To figure out a financial model and its usefulness, it is necessary to understand its assumptions and its role in the decision. The article highlights that the CVP model has ten assumption and constraints: behavior of costs and revenue is linear, constant selling prices, prices of production input, all costs can be grouped into fixed and variable costs, total fixed costs stay constant and total variable costs are proportional to volume, constant efficiency and productivity, steady sales mix or one product, revenues and costs are being compared over a unit-volume base and volume is the driver of costs. A CVP model that incorporates uncertainty would, therefore, provide a good introduction to the crucial but challenging issue of uncertainty decision – making. Practically all real business decisions take place under uncertain circumstances and at least a modest degree of familiarity with an analytical decision – making approaches under uncertainty could benefit future leaders in business.

Uncertain CVP analysis may be attributed to the diversity and complexity of research, i.e., multi-product, multiple uncertainty resources, the assumption that demand exceeds, equals or lower than product sales, the use of the basic accounting model CVP vs economic demand related to the amount sold to price and unit cost functions. The CVP analysis is anticipated to be complicated and connects with various economic and mathematical concepts. In order to simplify the assumption of the CVP analysis, managers should consider more sophisticated analytical approaches. The CVP analysis is believed to provide an excellent context for the introduction of these analytical approaches. The intense simplicity of the basic deterministic CVP model makes it possible to perceive the added elements more clearly by generalizing the model to a stochastic model. Decision making under uncertainty can be described as a trade-off between anticipated profit and the breakeven.

不確定的本量利分析可能是由于多樣性和復雜性的研究,例如,多產品,多個不確定性資源,假設需求超過,等于或低于產品銷售,使用基本的會計模型CVP vs經濟需求與銷售數量的價格和單位成本函數。預計CVP分析將是復雜的，并與各種經濟和數學概念相聯系。為了簡化CVP分析的假設，管理者應該考慮更復雜的分析方法。CVP分析被認為為引入這些分析方法提供了一個極好的背景?；敬_定性CVP模型的高度簡明性使得將該模型推廣到隨機模型能夠更清楚地感知添加的元素。不確定性下的決策可以描述為預期利潤和盈虧平衡之間的權衡。

Certainly, the CVP analysis is its popularity as a decision – making tool used to determine the volume or sales breakeven, but its usefulness is limited by the deterministic nature of the relationship. A CVP analysis can be treated as a random variable for one or all of these input variables. Overall, input and output variables are assumed to have unimodal distributions. Most CVP models have been distributed continuously. In other words, the CVP model utilizes continuous distribution. Instead of a continuous distribution, CVP model uses different approaches such as Lognormal, PERT, and Kumaraswamy.

The intense simplicity of the basic deterministic CVP model allows the elements to be perceived more clearly by generalizing the model to stochastic elements. When input independence is suspected when the CVP model cannot produce the factual reality of risk, a faulty decision is therefore taken, as in the case of normal distribution. The correlation between these variables should start with the most common and simple Pearson correlation method. Managers must, therefore, overcome these obstacles and appreciate a deeper understanding of the dependence problem needed to shape the real facets of uncertainty in the world.

2.5. The Analysis of Cost Volume Profit Relationships

The statement on profit and loss indicates what profit was on the specific volume of business carried out during the period for which the statement was prepared. This form of statement is appropriate if consideration is limited to a given volume, as it is when historical results are reported or when the statement represents the expected results at a predicted volume.

Analysis of the relationships between cost, volume and profit can be made to predict the likely effect on profits expected to result from a volume change. An understanding of the relationships between costs, volume and profits, together with factual information on the effects of volume changes on the company, is helpful for management through a wide range of planning and control problems.

The analysis of the relationship between cost and volume and profit begins with determining how the costs vary with volume. To this end, costs are classified as fixed or variable in order to determine the number of fixed costs and the rate at which variable costs change with volume. Since profit is the difference between revenue and cost, the profit rate varies with volume. These three figures are constant for any volume within the scope of the analysis, insofar as non-volume factors remain the same. Together they describe what can be called the company’s profit structure.

分析成本與產量和利潤之間的關系，首先要確定成本如何隨產量變化。為此，成本分為固定成本和可變成本，以確定固定成本的數量和可變成本隨數量變化的比率。因為利潤是收入和成本之間的差額，所以利潤率隨數量而變化。這三個數字對于分析范圍內的任何體積都是恒定的，只要非體積因素保持不變。它們共同描述了所謂的公司利潤結構。

Where flexible budgets and standard costs are available, the cost data for the cost-volume-profit analysis are provided. These budgets are used to obtain amounts of the variable expenditure at the predicted volume level. When these variable costs are combined with direct material and direct labor, the total variable cost is determined by volume. Fixed manufacturing, sales and administrative cost components as determined in the respective budgets are added to the total.

Companies without budgets rely on historical records as the main sources for the preparation of CVP analysis. However, volume-related cost variations are usually more or less obscured by changes in prices, products, methods and equipment used in manufacturing and sales, changes in cost accounting classification. Financial statements are sometimes advocated at the data source for CVP studies related to investment or credit risk analysis.

沒有預算的公司依賴歷史記錄作為準備CVP分析的主要來源。然而，與產量相關的成本變化通?；蚨嗷蛏俚乇粌r格、產品、制造和銷售中使用的方法和設備的變化、成本會計分類的變化所掩蓋。財務報表有時被主張作為與投資或信用風險分析相關的CVP研究的數據來源。

Like break-even analysis, some of the ratios are important in CVP analysis. The marginal revenue ratio is the percentage of the dollar available to cover fixed costs and profits after the percentage required for variable costs has been deducted. It supplements the cost ratio of the variable. The marginal income ratio determines the increase/decrease in profit expected from volume changes if no change occurs in other factors. When the marginal income ratio is known, it is possible to determine the effect of adding or losing a certain block of business on the marginal balance of the company and therefore on its profit. The safety margin indicates the decline in sales volume that can occur before profits disappear. The trend in the ratio between sales volume and break-even point also indicates fundamental changes in the company’s ability to make profits. The breakpoint indicates the sales volume to be obtained by the company to cover its costs without profit. It coincides with the crossing of total cost and revenue lines. A confusing problem that often arises from the mixing factor when determining breakpoints by product lines. When the individual product break is added, even points differ from the total breakpoint, unless the sales figure for each product line is the same as the total sales figure for the individual product break point for the total break point.

There are many cases in which large differences in products and methods with which they are manufactured and sold make it impossible to combine them without destroying the meaning of the figures. While cost and sales data expressed in dollars can be added together, the aggregates obtained for none of the components can be representative. Under these conditions, separate analyzes must be carried out for groups of products that are reasonably similar.

Volume is the only factor that causes costs to vary. Sales figures are also influenced by non-volume factors like unit prices and mixtures. To study the variation in costs and profits with volume, the analysis is acceptable for a constant period. By changing these underlying assumptions, break-even points that are quite different can be obtained, and each of these break-even points is equally valid for the specific assumptions.

What if a company’s fixed costs have changed? The change in fixed costs may follow a change in variable cost and selling price. Besides, break-even volume may be affecting due to the change in fixed costs. Under other conditions, it is obvious that variable cost can change too. A unit change in variable cost may affect the marginal income ratio and the break-even point. Wages, salary, operating efficiency, product specifications, manufacturing and selling methods can be defined as a variable cost and a change in one of them may also change marginal income ratio and break even.

The paper says that CVP analysis may be a useful tool for overcoming some problems in business planning. On the other hand, some short and long-range problems may arise from CVP analysis. In the long run, it is thought that fixed costs are used for short periods and variable costs are used for a longer period. Therefore, if a manager wants to use the analysis for a long-term, s/he will use for the impact of costs and profits of proposed investment plans (especially plant and equipment). On the other hand, in the short run, managers can use it for short-term budget planning and strategic decisions regarding sales and pricing.

本文認為，CVP分析可能是克服商業計劃中一些問題的一個有用的工具。另一方面，CVP分析可能會產生一些短期和長期的問題。從長遠來看，人們認為固定成本用于短期，而可變成本用于較長時期。因此，如果一個經理想要長期使用這種分析，他/她就會使用這種方法來分析被提議的投資計劃(特別是工廠和設備)的成本和利潤的影響。另一方面，在短期內，管理者可以使用它來進行短期預算計劃和關于銷售和定價的戰略決策。

**3. CONCLUSION****結論**

Cost-Volume-Profit Analysis helps companies and gives fundamental insight a lot in terms of its current and estimated future. When each term is analyzed one by one, it can be observed that they are very crucial items for a company to sustain itself. “Cost” is the term which is about the required amount of money before starting an activity or it can be defined the forecasted price of an action. Then, the term “Volume” means the quantity of the company produces. “Profit” can be characterized as the difference between the amount earned and spend during activities such as buying, operating or producing. Moreover, a company has four basic functions: planning, controlling, organizing and directing. For four of them, the Cost-Volume-Profit analysis is the very primary tool. Therefore, CVP Analysis helps managers to estimate budget by looking at it. To analyze CVP, a manager has to look at some data such as break-even analysis, contribution margin, contribution margin ratio, or margin of safety. All of them gives a deep analyze of CVP Analysis.

成本-產量-利潤分析幫助企業，并提供了基本的洞察力，在其當前和估計的未來。當每一個術語被逐一分析時，可以看出它們是一個公司維持自身的非常關鍵的項目?！俺杀尽笔且粋€術語，它是關于開始一項活動之前所需的錢的數量，或者它可以被定義為一項活動的預測價格。然后，“量”一詞是指公司的生產數量?！袄麧櫋笨梢员幻枋鰹樵谫徺I、經營或生產等活動中賺取的金額和花費之間的差額。此外，公司有四個基本職能:計劃、控制、組織和指導。其中四家公司的成本-產量-利潤分析是最主要的工具。因此，CVP分析可以幫助管理者通過觀察預算來估算預算。要分析CVP，經理必須看一些數據，如盈虧平衡分析，貢獻邊際，貢獻邊際比率，或安全邊際。對CVP分析進行了深入的分析。

Of course, CVP Analysis has some drawbacks. For example, CVP Analysis may be confusing if the company has multiple product lines. Because it is a general thought that each product line has its own break-even point, but if it is multiple, then the break-even has to be the whole line. Since they are not equal to each other, it may create complexity.

Although CVP Analysis has some obstacles, it is one of the useful analysis of the company. On the other, CVP analysis may not fit for the long-term; therefore, it is better to use for short-term plans.

雖然CVP分析有一些障礙，但它是一個有用的分析公司。另一方面，CVP分析可能不適合長期進行;因此，最好用于短期計劃。

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