Article,
Utilizing Cost-Volume-Profit Analysis for Informed Decision Making in Small Business Management
Central Asian Journal of Innovations on Tourism Management and Finance, 4 (2): 102-115 (February 2023)
Abstract
The study assessed the use of cost volume profit analysis as a management tool for decision-making in small scale businesses in Anambra state, nigeria. The specific objectives of this study was to ascertain how CVP analysis enhances profit planning, pricing decision and production planning in small scale firms in Anambra state. A descriptive survey design was adopted for the study. The population of this study was made up of accounting academics, managers and accountants of small scale enterprises in Awka metropolis. A sample of 93 respondents filled and returned the online questionnaire administered. This research made use of primary data which were collected using structured questionnaires developed based on 5-point likert scale system. Techniques used for the descriptive statistical analysis were mean, percentages and frequency counts. Student’s t-test was applied to test the hypotheses of the study at 5% level of significance. The findings revealed that the use of CVP analysis significantly enhances profit planning, pricing decision and production planning in small scale firms in Anambra state at 5% level. It was recommended therefore that small scale businesses should deploy cost volume-profit analysis in making vital and reasonable decision particularly when faced with managerial problems which have cost volume and profit implications.
