Topic: AN ANALYSIS ON COST-VOLUME-PROFIT AND PROFITABILTY TARGET

Chapter One

INTRODUCTION

1.1 Background of the Study

1.2 Statement of Problem

Cost-volume-profit (CVP) analysis is a managerial tool and can be used to achieve corporate profitability in any organization. Cost-volume-profit (CVP) analysis is a tool that can be used in firms that are faced with problems having cost, volume and profit implications. It is a true fact that certain cost elements of a firm not only vary but are usually large in proportion e.g. material and labour. Therefore, the main concern of this research study is to profer solution to the following problems: Non-employment of sales value in the determination of profitability in firms. Lack of relationship between sales value and total cost of firms. Non-incorporation of sales value in investment decision in firms. Inadequate financial data for cost and profit analysis in firms.

1.3 Aim and Objectives of the Study

This research study will be focused on cost-volume-profit analysis and profitability target (A survey of some selected firms listed in Nigerian Stock Exchange). The main objective of this study are as follows: To determine the effect of sales value on the profitability in firms. To know the relationship between sales value and total cost of firms. To make provision for the incorporation of sales value in investment decision of firms. To justify the need for adequate financial data for cost and profit analysis in firms.

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