selling price, volume, costs
Companies can use Cost-Volume-Profit Analysis (CVP analysis), also known as Break-Even Analysis, to analyze how changes in sales volume and expenses (both variable and fixed) impact a company's profit. With this data, businesses may examine how many pieces must be delivered to break even, to hit a specific profit level, or to maintain a margin of safety in order to have a better understanding of overall performance.
Gross margin is calculated using the standard income statement's order of revenues less cost of goods sold, whereas net income is calculated using the reverse order of revenues and costs. While the idea is the same, the style of a contribution margin profit statement differs by separating variable and fixed expenses.
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