Relationship Of The Break Even Point for The Planning Of Profit

By knowing the principal point (break even point) of a company, then it is extremely big meaning for the leadership, because it can provide a useful overview to carry out some of the wisdom of the company, especially in the planned profit.

Therefore, the success of a company is generally characterized by the management capabilities in seeing the possibilities or opportunities in the future. Therefore, managers should be able to plan the future of his company. As for the frequently used in assessing the success or failure of a company management is profit earned from its activities. As for all the profit, always influenced by three factors, namely the selling price, the costs in the production process and production volume.

The third factor mentioned above, are very closely related in which the cost of planning the sale price to achieve a desired profit level, the selling price to induce the production volume and production volume affects costs.

Through the analysis of break even can be known of the relationship between the volume of production and sales with the amount of the fees and profits that also called | cost profit volume analysis.

In planning for this analysis is the profit planning approach. Break even analysis  has a relationship costs – advantages – the volume of activity, then the analysis is often called CPV Analysis.

In planning for a profit, break even analysis is the basis of profit planning approach that is based on the relationship between the cost (cost) and income (revenue), the expected benefits the company depends on the flow of the production process is running.

Profit Planning relationship between costs, volume and profit, break even holds a very important role especially in the selection of an alternative formulation, action and wisdom for the days to come. An investigation into the relationship that exists between the cost, sales volume and profit is very important for management to be able to make a good plan. Based on the investigation of this will get an idea of a good cost classification for the purpose of managerial planning and strategy.