Question $2$

The concept of Cost$-$Volume$-$Profit analysis remains vital to the operations of every entity as it

provides good information on the profitability to expect at various levels of operations by an

entity within a relevant activity range. This concept is key in evaluating business proposals and

turnaround projects for businesses. You have been appointed as the head of SME support at the

Venture Capital Trust Fund of Ghana.

Using information from a company you know, prepare training materials on C$-$V$-$P for the next

SME clinic of the Fund. Your training materials should highlight all key points in C$-$V$-$P analysis

including but not limited to:

$1.$ The cost statement of the entity.

$2.$ The applicability of C$-$V$-$P analysis in the entity$$s decision making.

$3.$ The understanding of the concept of Margin of Safety and its applicability

$4.$ The sensitivity of various quantitative factors that influence an entity$$s break$-$even point.

Required:

Prepare the training material