Costs, Volumes and Profits Certification

Course Code:
Duration:
0.75 hours
Qualification:
Costs, Volumes and Profits Certification
Exams Included:
Yes
Compatibility:
All major devices and browsers
Delivery method:
Online (In-house also available )
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Costs, Volumes and Profits
The difference between business revenue and costs of operation make up business profits. Sales volumes and the cost of products or services can impact the potential of a business to generate profits. This relationship is explained through cost-volume-profit analysis.

The difference between sales and variable costs or the cost of goods and/or services sold makes up profits. After deducting fixed costs from the gross profit, you are left with income or the net profit. Fixed costs range from rent and interest to insurance and labour costs. They are indirectly related to production of goods and services.

Higher costs lead to lower profits and vice versa. Increasing revenue or lowering costs can increase profits. Improving the efficiency of business operations, reducing the cost of material and cutting on labour can reduce costs. The cuts on costs should not cause a drop in business revenue to increase profits.

If the sales volumes are higher than variable costs, more profits can be generated. Constant sales volume and revenue with reduced costs can increase profits. This course explains the relationship between costs, volumes and profits through cost-volume-profit analysis.

We show how changes in prices, margins and unit volumes of products or services can affect a company’s ability to generate profits. Cost-volume-profit or CVP analysis is a critical tool for financial analysis that helps businesses determine their ability to become profitable.

You Will Learn:
The definition of the terms: costs, volumes and profits
The relationship between costs, volumes and profits
How to calculate cost-volume-profit or CVP analysis
The assumptions made during CVP analysis
How to calculate contribution margin and contribution margin ratio
Pound and unit break-even points
How to create a contribution margin income statement
The benefits of CVP analysis
Benefits of the Course:
Taking this course will help you:
Know the relationship between cost, volume and profits
Know how to calculate CVP analysis
Know how to use analysis results to increase business profits
Know the importance of the relationship of cost, volume and profits in business operations
Know the various benefits of CVP analysis in business
Learn how to increase profits in your current or future business

Course Modules/Lessons
Module 01: Costs, Volumes and Profits