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Profit cost volume relationshipCost volume profit relationship is the analysis and it studies the relationships between the factorsand its impact on the profits such as selling price per unit and total sales amount. The fixed costand the variable cost are the total cost. Cost-volume-profit (CVP) evaluation is a technique of feeaccounting that appears at the effect that various degrees of prices and extent have on runningprofit. The cost-volume-profit evaluation makes numerous assumptions, together with that theincome price, constant costs, and variable value per unit are constant. The cost-volume-profitanalysis, additionally typically regarded as a break-even analysis, appears to decide the break-even factor for distinctive income volumes and price structures, which can be beneficial formanagers making non-permanent monetary decisions.CVP evaluation is most frequently used to decide a company's break-even point. This is the stageof income the place the agency will no longer incur a loss, but now not make a profit. Tocalculate the break-even point, you need to first calculate the contribution margin. Thecontribution margin is a company's income much less its variable expenses. Then, divide thecompany's constant expenses via the contribution margin. This will supply you the company'sbreak-even factor in whole bucks of income. Like the break-even point, the margin of safety canbe expressed either in units or sales dollars. However, the margin of safety is most oftenexpressed as a percentage of sales. The first step in calculating the margin of safety is tocalculate the break-even point in sales dollars.