Cost Volume Profit Analysis (CVP) – Managerial Accounting
What you'll learn
- Define key principles of managerial and cost accounting to solidify foundational knowledge.
- Demonstrate construction and use of a Contribution Margin Income Statement.
- Classify business costs into fixed, variable, and mixed categories.
- Calculate the break-even point in units and revenue for effective planning.
- Forecast future business performance using CVP analysis techniques.
- Adapt CVP analysis to scenarios with multiple inventory products.
- Explain operating leverage, compute it, and discuss its implications.
- Evaluate assumptions underpinning CVP analysis and recognize its limitations.
- Apply learned concepts to solve comprehensive Excel-based problems.
- Assess the impact of changes in cost and volume on profit, using CVP analysis tools.
- Formulate strategies to optimize profitability using the results of CVP analysis.
- Identify the relevance and application of CVP analysis in various business contexts.
- Distinguish between the high-low method and scatter diagram method for handling mixed costs.
- Basic Accounting Knowledge: Understanding of fundamental accounting concepts and terminologies.
- Familiarity with Financial Statements: Basic knowledge of income statements and balance sheets will be beneficial.
- Mathematical Skills: Basic mathematical and analytical skills are needed for calculations involved in CVP analysis.
- Willingness to Learn: Most importantly, students should have an eagerness to learn and understand complex accounting concepts.
Unlock the power of managerial and cost accounting with our comprehensive Udemy course. This course dives deep into the crucial managerial accounting concept of cost-volume-profit (CVP) analysis, a dynamic tool that helps businesses determine how changes in costs and volumes affect their profits.
We kick off the course with a robust introduction to managerial accounting and cost accounting, clearly outlining their differences. The central tool for our exploration will be the Contribution Margin Income Statement, providing a roadmap as we delve into each component of CVP analysis.
Intricate concepts such as mixed costs are broken down, discussing their implications, and how to handle them effectively using methods like the high-low method and scatter diagram method.
Grasp the fundamental concept of break-even point in both units and revenue, building a strong foundation for subsequent topics in cost-volume-profit analysis. Forecasting becomes less daunting as we illuminate how CVP analysis can be leveraged for accurate projections and informed decision-making.
For businesses with multiple inventory products, we elucidate techniques to apply CVP analysis effectively, ensuring a wide application of the knowledge acquired.
Further, we navigate the concept of operating leverage - understanding its calculation and usefulness in business operations. We openly discuss the assumptions that underlie CVP analysis and address its potential limitations, ensuring you have a well-rounded understanding of its application in real-world scenarios.
The course features a comprehensive problem worked out using Excel, with step-by-step instructional videos to ensure you can follow along and fully grasp the application of the concepts learned.
With numerous Excel worksheets to assist your learning, you'll be able to practice and consolidate your understanding at every stage. Worksheets typically include three tabs - one with the completed problem, another with a preformatted worksheet to fill in, and a blank worksheet, enabling you to build your own tables from scratch if desired.
Whether you're an aspiring accountant, a business owner, a financial professional or a student, this course will arm you with the skills to navigate and apply cost-volume-profit analysis, and take your understanding of managerial and cost accounting to new heights.
Who this course is for:
- Aspiring Accountants: Those who are pursuing a career in accounting and want to gain a deeper understanding of managerial and cost accounting principles.
- Business Owners/Entrepreneurs: Individuals running their own business who want to have a better understanding of how costs, volume, and profit are interconnected.
- Finance Professionals: Professionals working in finance who wish to improve their skills and knowledge of cost management and profit optimization.
- Students: Students studying business, finance, or accounting who want to supplement their college education with practical, real-world applications.
- Management Consultants: Consultants who advise businesses on cost management and efficiency improvements.
- Anyone Interested in Business Finance: This course is also suitable for anyone with an interest in understanding the financial dynamics of a business better.
Through working with students from many different schools, Mr. Steele has learned best practices for helping people understand accounting fast. Learning new skills and finding the best way to share knowledge with people who can benefit from it is a passion of his.
Mr. Steele has experience working as a practicing Certified Public Accountant (CPA), an accounting and business instructor, and curriculum developer. He has enjoyed putting together quality tools to improve learning and has been teaching, making instructional resources, and building curriculum since 2009. He has been a practicing CPA since 2005. Mr. Steele is a practicing CPA, has a Certified Post-Secondary Instructor (CPI) credential, a Master of Science in taxation from Golden Gate University, a Bachelor’s Degree in Business Economics with an emphasis in accounting from The University of California Santa Barbara, and a Global Management Accounting Designation (CGMA) from The American Institute of CPA (AICPA).
Mr. Steele has also authored five books that can be found on Amazon or in audiobook format on Audible. He has developed bestselling courses in accounting topics including financial accounting and QuickBooks accounting software.
In addition to working as an accountant, teaching, and developing courses Mr. Steele has helped create an accounting website at accountinginstruction, a YouTube channel called Accounting Instruction, Help, and How Too, and has developed supplemental resources including a Facebook Page, Twitter Page, and Podcasts that can be found on I-tunes, Stitcher, or Soundcloud. Mr. Steele's teaching philosophy is to make content applicable, understandable, and accessible.
Adult learners are looking for application when they learn new skills. In other words, learners want to be able to apply skills in the real world to help their lives. Mr. Steele’s formal accounting education, practical work experience, and substantial teaching experience allow him to create a curriculum that combines traditional accounting education with practical knowledge and application. He accomplishes the goals of making accounting useful and applicable by combining theory with real-world software like Excel and QuickBooks.
Many courses teach QuickBooks data entry or Excel functions but are not providing the real value learners want. Real value is a result of learning technical skills like applications, in conjunction with specific goals, like accounting goals, including being able to interpret the performance of a business.
Mr. Steele makes knowledge understandable by breaking down complex concepts into smaller units with specific objectives and using step by step learning processes to understand each unit. Many accounting textbooks cram way too much information into a course, making it impossible to understand any unit fully. By breaking the content down into digestible chunks, we can move forward much faster.
Mr. Steele also makes use of color association in both presentations and Excel worksheets, a learning tool often overlooked in the accounting field, but one that can vastly improve the speed and comprehension of learning accounting concepts.
The material is also made understandable through the application of concepts learned. Courses will typically demonstrate the accounting concepts and then provide an Excel worksheet or practice problems to work through the concepts covered. The practice problems will be accompanied by an instructional video to work through the problem in step by step format. Excel worksheets will be preformatted, usually including an answer tab that shows the completed problem, and a practice tab where learners can complete the problem along with a step by step presentation video.
Mr. Steele makes learning accounting accessible by making use of technology and partnering with teaching platforms that have a vision of spreading knowledge like Udemy.