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Cost - Volume - Profit Analysis – An Instrument of Managerial Control of the Economic Entities in the Extractive Industry

Author

Listed:
  • Răscolean Ilie

    (University of PetroÅŸani)

  • Rakos Ileana-Sorina

    (University of PetroÅŸani)

Abstract

This study intends to demonstrate that the cost-volume-profit analysis is based on the analysis of the balance point, of the relations between the prices of goods, the activity’s volume, the unit variable cost, the total fixed costs, the balance of the mixed production, the managerial planning and the decision making is actually a financial model which highlights the changes occurred in the profit size as a consequence of the amendment of the sold volume of good, of the selling price and of the manufacturing costs. The case study was conducted in Mol Romania, an economic entity with integrated activity on oil and natural gas. The CPV relation offers a general model of the economic activity.The study ends up with conclusions in what concerns the advantages offered by the analysis which can be made on the basis of the cost-volume-profit relation and that can be implemented in the decision making process.

Suggested Citation

  • Răscolean Ilie & Rakos Ileana-Sorina, 2017. "Cost - Volume - Profit Analysis – An Instrument of Managerial Control of the Economic Entities in the Extractive Industry," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 627-632, December.
    • Handle: RePEc:ovi:oviste:v:xvii:y:2017:i:2:p:627-632
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    More about this item

    Keywords

    variable costs; fixed costs; cost-volume-profit; economic entity; breakeven level;
    All these keywords.

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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