COST-VOLUME-PROFIT ANALYSIS AS A SOURCE OF INFORMATION FOR MAKING MANAGERIAL DECISIONS

The issues of calculation of cost and the registration of expenditures have always been topical, especially that they are intended to the reorientation of the accumulated experience of accounting at the direction of the solution of new problems. The decisions of the managing circle can be effective if they are based on the analysis of the relationships between cost, volume and profit. During the analytical research, we have studied “cost-volume” and “cost-volume-profit” relations among the most important indices characterizing the industrial activities of the organization, whose analysis has a great role in the matter of the management and control of costs. The analysis of the production cost structure is an important tool to make managerial decisions about the production and sales of output. This allows to estimate the relationships among products selling price, production and sales volumes, marginal profit, direct variable costs per unit of output and fixed costs. Its practical application, in our opinion, will lead to the provision of information for making managerial decisions on the following issues related to the production and economic activity: assessment of marginal profit, contribution margine and financial stability, decisions on the expediency of continuing or stopping the production of the given product, make or buy decisions connected to the raw materials, pricing decisions for the new products, decisions on selection and renewal of production technologies, development of a more effective manufacturing and sales plan.