Cost Volume Profit Analysis - Target Profit Analysis in Accounting

The video tutorial explains Cost-Volume-Profit (CVP) analysis, focusing on determining the sales level needed to achieve a specific operating income. It introduces a basic profit equation and breaks down its components: unit sales price (USP), unit variable cost (UVC), and fixed costs (FC). The tutorial simplifies the equation to find the target profit in units or dollars, using the unit contribution margin (UCM) and contribution margin ratio (CMR). An example demonstrates calculating the number of units or sales dollars required to reach a desired net operating income.

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