Financial Decision Making Entry

Questions: 1. How can they relate to the workplace? 2. How they can aid your personal and professional development? 3. Remember to be specific and give examples? Answers: 1. The Cost Volume Profit analysis (CVP) generally assists the managers of an organization to understand the associations that are present within the input costs, profit level and the sales volume. Therefore, it can be said that this CVP analysis is considered as an instrument that is mostly used by the managers of the businesses for making better decisions regarding its operations (Tan 2013). Moreover, the managers of the workplace can also illustrate the break-even point, its analysis and the contribution margin of the business by the help of the CVP analysis. Additionally, the CVP analysis helps in providing a detailed picture of the activities of the organization. On the other hand, the budgeting is considered as the internal part that helps in regulating a business effectively. The reason behind this is that the budget serves as an action plan for the managers of the workplace. Thus, the budgeting helps an organization to plan an action for running the business and also to measure the performance of the organization at the end of the year (Hope and Fraser 2013). 2. Based on the above study, it can be said that the budgeting and CVP analysis will help in both personal and professional development. The reason behind this is that the importance of using budgeting and CVP analysis in an organization has influenced much and their significance will help an individual to implement these either in his own personal business or in his workplace for betterment of the firm. 3. Example of CVP Analysis Example of Budgeting References Tan, K., 2013. An Income Statement Teaching Approach for Cost-Volume-Profit (CVP) Analysis by Using a Companys CVP Model.Journal of Accounting and Finance, v. 11, no. 4, p. 23-36. Hope, J. and Fraser, R., 2013.Beyond budgeting: how managers can break free from the annual performance trap. Harvard Business Press.