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Performance Management By Cvp Analysis

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  • Diana ARMEAN
  • Maria-Larisa ARDELEANU

Abstract

The paper presents the stage of knowledge the cost-volume-profit analysis (CVP analysis), namely the principles, objectives and its usefulness for the performance management. The main objective of the paper is to implement the CVP analysis by calculating activity indicators on a Romanian company. To achieve the main goal of the research, we approached concepts such as costs, revenues, production volume, profit, decision making, what if analysis needed by the management to develop different scenarios on production volume, cost, sales price that lead to conclusive decisions in the near future. The research methodology corresponds to the research objective and is circumscribed to an archival research regarding literature review and the exploratory case study to highlight the effects of CVP analysis on the outcome by modifying the various factors. The basis of the research is the company Boromir, in which we studied the impact of CVP analysis on bakery activity. In order to apply the presented concepts, we highlighted the usefulness of CVP analysis in the decision making process. The main result of the research is that the CVP analysis applied to Boromir can give it various opportunities to maximize profits for the upcoming period. The projected scenarios at the company level have led to the possibility of adopting strategic decisions such as investing in promotion, reducing the sales price and changing the structure of fixed and variable costs in total costs

Suggested Citation

  • Diana ARMEAN & Maria-Larisa ARDELEANU, 2017. "Performance Management By Cvp Analysis," Business Excellence and Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 7(2), pages 72-93, June.
    • Handle: RePEc:rom:bemann:v:7:y:2017:i:2:p:72-93
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    File URL: https://beman.ase.ro/no72/5.pdf
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    References listed on IDEAS

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    1. J.C.Ihemeje & Geff Okereafor & Bashir M. Ogungbangb, 2015. "Cost-volume-profit Analysis and Decision Making in the Manufacturing Industries of Nigeria," Journal of International Business Research and Marketing, Inovatus Services Ltd., vol. 1(1), pages 7-15, November.
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    Cited by:

    1. Gheorghe CARSTEA & Razvan-Andrei CORBOS & Ruxandra-Irina POPESCU & Ovidiu-Iulian BUNEA, 2017. "Analysis Of The Influence Of Some Indicators On The Profitability Of The Fmcg Retail Market In Romania," Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 11(1), pages 481-492, November.

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