Economic Themes (2011) 49 (4) 13, 713-726


Dejan Riznić, Predrag Marjanović

Abstract: The limitations of CVP analysis (cost-volume-profit) may be used as the additional utility, i.e. the managing instrument in the cause of realization one of the primary aims-the maximizing of the profit of the firm. The CVP analysis, in the framework of analysis of the break point gained a huge popularity among its managing stuff-because of its transparency ease-of-use and the possibility of graphic (visual) mathematical overview of the planed and the realized results for the needs of controlling. On the other hand, due to restrictions of the theoretical and practical character it is not necessary to accept it without reserve and without a criticism. Namely, the information acquired on the basis of analysis of the results of breakeven point are exclusively for short term business making of decisions for the situations of unrealized production capabilities in the circle of the stable economic ambience. The model operates with one stable variable (the volume of activities),while the rest of the factors such as consisting elements of the financial result are constant.This pints out to the conclusion that the mutual interaction of the rest of important elements is not in use,which is not in accord with dynamical interactions which are used in theoretical principles and production industry practice.On the basis of those arguments we can may make a conclusion that the concept of the braking point is based on the statical approach with quantitative orientation and because of that fact it must be combined with other relevant information od dynamic and qualitative character.The structure of work is thus conceived to completely responds to the aim of exploration,which can be defined in the shortest way as completely critical review of the limitation of the CVP analysis in the dynamic scope.

Keywords:  CVP analysis; breakeven point; the profit from sell; costs

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