Babiak N., Krutous N. CVP-analysis in the conditions of multiproduct manufacturing as a tool of operational controlling

UDC 658.155:005.915

 

Babiak N.

Krutous N.

 

Abstract. Introduction. This article is devoted to CVPanalysis, which is an operational tool of cost controlling, and without it the process of operational profit planning of any enterprise is impossible. In this article the emphasis is made on the limitations and assumptions that “cost-volume-profit” analysis has, as well as opportunities that this method provides to companies are identified, including in cases of multiproduct manufacturing

Purpose. The purpose of this article is approbation and identifying of features of CVP-analysis used in practical activity of industrial enterprises, in particular in the conditions of multiproduct manufacturing.

Results. The article reveals features of CVP-analysis in the conditions of multiproduct manufacturing and the authors compare methods of its implementation. Possibilities of application of analysis results during managerial decisions making in the system of operational controlling are identified. The authors research the issue of distribution of total fixed undistributed costs for certain types of production by different methods, as well as determining of break-even level of production and sales of certain types of production on the basis of weighted average profit margin. Modeling of different scenarios of production and sale of certain types of production made it possible to determine the maximum and minimum possible level of operational profit under the influence of changes in demand, assortment and enterprise’s production marginality. With the help of operational lever in the framework of operational analysis at production enterprise the influence of changes in the level of fixed costs and specific variable costs on the profit are researched.

Conclusions. In the article, it is proved that the success of CVP-analysis depends on solving the number of operational controlling tasks, meaning: optimization of cost level, accurate forecasting of demand and formation of products assortment with high marginality, managing the ratio of fixed and variable costs with the aim of increasing operational profit and increase efficiency of enterprise production activities.

Keywords: CVP analysis, variable costs, fixed costs, margin profit, break-even point, operational analysis, operational controlling

 

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