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The analysis of cost-profit-volume in making a decision about the volume of activity of a company

Author

Listed:
  • Nicolae SICHIGEA
  • Tudor CIUREZU

    (University of Craiova)

Abstract

This work tries to dimension the volume of activity so that it can emphasis the break even point and the predicted volume for the desired profit. The relationship between volume-cost-profit, known as economies of scale, is explained by the unit profit growth as the volume of production raises, as a consequence of the decrease of the unit cost by reducing the fixed unit costs and keeping the variable unit costs as they are. There are analyzed the effect in trying to eliminate the competition and in practicing a political monopoly by the top companies and the measures of political economy undertook to erase the unfair competition and dumping.

Suggested Citation

  • Nicolae SICHIGEA & Tudor CIUREZU, 2009. "The analysis of cost-profit-volume in making a decision about the volume of activity of a company," Finante - provocarile viitorului (Finance - Challenges of the Future), University of Craiova, Faculty of Economics and Business Administration, vol. 1(9), pages 66-69, May.
    • Handle: RePEc:aio:fpvfcf:v:1:y:2009:i:9:p:66-69
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    More about this item

    Keywords

    cost; profit; volume of activity; economies of scale;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

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