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4 Cost Volume Profit (CVP) Analysis Learning Objectives LO LO1 Identify the purposes of cost volume profit analysis LO2 Explain how the contribution margin income statement is used for cost volume profit analysis LO3 Apply cost volume profit analysis to show the effects on net operating income from changes in variable costs, fixed costs, selling price, and sales volume LO4 Calculate the breakeven point in sales dollars and units sold LO5 Calculate target profit in sales dollars and units sold Purposes of cost volume profit (CVP) analysis LO1 Cost volume profit (CVP) analysis helps managers make many important decisions about what products and services to offer, what prices to charge, what marketing strategy to use, and what cost structure to maintain

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