Sensitivity of indicators used in cost-volume-profit analysis

Abstract

The need for cost-volume-profit analysis (CVP) starts from the need to optimize and manage costs due to unforeseen events that accompany economic activity in all areas. In this paper, the dependency relationship between the three cost-volume-profit indicators was analyzed to highlight the need to permanently track and optimize these variables so that managers' decisions can be supported by adaptive analyzes to concrete needs. The study also includes a sensitivity analysis that has shown that the magnitude and meaning of changes occurring when changes occur to one or more variables may be different due to direct and inverse relationships that are established between these variables.