Utilizing Cost-Volume-Profit Analysis for Informed Decision Making in Small Business Management

  • Gilbert Ogechukwu Nworie Department of Accountancy, Nnamdi Azikiwe University, Awka, Anmabra state, Nigeria
  • Tochukwu Gloria Okafor Department of Accountancy, Nnamdi Azikiwe University, Awka, Anmabra state, Nigeria
  • Chinyere Christiana Igwebuike Department of Accountancy, Nnamdi Azikiwe University, Awka, Anmabra state, Nigeria
  • Dr. Onyali, Chidiebele Innocent Department of Accountancy, Nnamdi Azikiwe University, Awka, Anmabra state, Nigeria
Keywords: Cost volume profit analysis, Decision-making, Profit planning, Pricing decision and Production planning


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.


1. Abdullahi, S. R., Mukhtar, I. S., Sulaimon, B. A. & Musa, M. H. (2017). Cost-Volume-Profit Analysis as a Management Tool for Decision Making In Small Business Enterprise within Bayero University, Kano. Journal of Business and Management, 19(2), 40-45.
2. Agwu, E. (2018). Analysis of the impact of strategic management on the business performance of SMEs in Nigeria. Academy of Strategic Management, 17(1), 1-20.
3. Ali, R. & Moudud-Ul-Huq, S. (2016). Textile Industry in Bangladesh: An Analysis of CVP. Management Studies and Economic Systems, 2(4), 287-298.
4. Al-Tarawneh H. A., (2012). The main factors beyond decision making. Journal of Management Research, 4(1), 1-23.
5. Arif, A. (2018). Analyzing Cost Volume Profit Relationship on Small Fast Food Shop (A Study on Bangladeshi Fast Food Industry). International Journal of Business and Management Invention, 7(11), 6-17.
6. Ayaundu, S. O. & Ogoun, S. A. (2020). Firm Attributes Count and Management Accounting Practices in an Emerging Market. International Journal of Business and Economics Research, 9(3): 94-102.
7. Georgiev D. (2014), Application of „Cost-Volume-Profit‟ Analysis in the Hotel Industry (Based On Survey Data of High-Ranking Hotels in the North-East Region of Bulgaria). Journal of University of Economics Varna, 48(1), 1-10.
8. Gichaaga, P. M. (2014). Effects of MAP on financial performance of manufacturing companies in Kenya. Master of Science in Finance Dissertation, School of Business, University of Nairobi.
9. Glautier, M. W. E & Underdown B. (2001). Accounting Theory and Practice. Pearson Education Limited. Harlow England.
10. Ihemeje, J. C., Okereafor, G. & Ogungbangbe, B. M. (2015). Cost-volume-profit Analysis and Decision Making in the Manufacturing Industries of Nigeria. Journal of International Business Research and Marketing, 1(1), 7-15.
11. Kallio, A. (2018). Using of cost-volume-profit analysis in a manufacturing company. An Unpublished Research Project Submitted to Tallinn University of Technology.
12. Kavitha, R. (2018). Cost Volume Profitability Analysis - An Empirical Study With Reference To Salem Steel Authority of India Limited (SAIL), Tamilnadu. International Journal of Business and Management Invention, 7(5), 46-51.
13. Kee, R. (2007). Cost-Volume-Profit Analysis Incorporating the Cost of Capital. Journal of Managerial Issues, 19(4), 478-493.
14. Lucey, Terry (2003). Costing. TJ international PadstowCornwacl.
15. Lulaj, E. & Iseni, E. (2018). Role of Analysis CVP (Cost-Volume-Profit) as Important Indicator for Planning and Making Decisions in the Business Environment. European Journal of Economics and Business Studies, 4(2), 99-114.
16. Malarkodi, K. & Ranjitha, M. (2021). A Determinant Analysis of Cost Volume Profit of E.I.D-Parry (India) Limited Pugalur. Annals of R.S.C.B. 25(5), 2315-2322.
17. Maziriri E. T. & Miston M. (2017) Impact of Management Accounting Practices (Maps) on the Business Performance of Small and Medium Enterprises within the Gauteng Province of South Africa. Journal of Accounting and Management, 7(2), 12-25.
18. Meshack, A., Nworie, G. O. & Orji, M. G. (2022). Poverty Reduction in Awka Metropolis: The Role of Entrepreneurship Productivity. Economit Journal: Scientific Journal of Accountancy, Management and Finance, 2(3), 244-262. DOI: 10.33258/economit.v2i3.794
19. Miller, G. J., & Whicker, M. L. (2017). Handbook of Research Methods in Public Administration, Second Edition. In H. United Kingdom: Aggarwal printing press.
20. Ndongolo, R. P. (2013). Analysis of performance of cost volume profit (CVP) analysis in manufacturing companies in Tanzania: a case of Tanzania Portland Cement Company (TPCC). Dodoma: The University of Dodoma. http://hdl.handle.net/20.500.12661/1751
21. Nguyen, C. V., Oanh, T. T., Phong, T. & Tran, T. V. (2020). Application of Cost-Volume-Profit Analysis in Decision-Making by Public Universities in Vietnam. Journal of Asian Finance, Economics and Business, 7(6), 305-316.
22. Nworie, G. O. & Mba, C. J. (2022). Modelling financial performance of food and beverages companies listed on Nigerian exchange group: the firm characteristics effect. Journal of Global Accounting, 8(3), 37 - 52. https://journals.unizik.edu.ng/index.php/joga/article/view/1418/1142
23. Nworie, G. O. & Oguejiofor, B. C. (2023). Management Information System and Performance of Cement Firms in Southeast Nigeria. International Journal of Accounting and Management Information Systems, 1(1), 1–15. https://doi.org/10.35912/ijamis.v1i1.1366
24. Nworie, G. O., Moedu, V. O. & Onyali, C. I. (2023). Contribution of Current Assets Management to the Financial Performance of Listed Consumer Goods Firms in Nigeria. International Journal of Trend in Scientific Research and Development, 7(1), 77-87, URL: www.ijtsrd.com/papers/ijtsrd52600.pdf
25. Okechukwu, A. E., Ekwunife, E. N. & Moneke, P. C. (2016). Cost volume profit analysis application in management decision of manufacturing companies in Nigeria: a comparative study. Journal of Accounting, Business and Social Sciences, 1(1), 1-28.
26. Okpala, K. E. & Osanebi, C. (2020). Cost volume profit analysis and profit planning in manufacturing SMEs in Nigeria. Asia-Pacific Management Accounting Journal, 15(2).
27. Olanipekun, W., Abioro, M., Akanni, L., Arulogun, O. & Rabiu, R. (2015). Impact of Strategic Management on Competitive Advantage and Organisational Performance – Evidence from Nigerian Bottling Company. Journal of Policy and Development Studies Vol. 9(2), 185-198.
28. Onyeizugbe, C. U. (2017) Practical Guide to Research Methodology in Management. Onitsha: Good Success Press.
29. Osazevbaru, H. O. (2014). Financial Modeling in Non-Profit Organizations: The Cost-Volume-Profit Approach. Research Journal of Finance and Accounting, 5(6), 64-71.
30. Sajedeh, B., Abekah, J. & Rahim, A. (2020). Integration of Cost Volume Profit Analysis under Uncertainty in Profit Planning: A Current Application. Strategies in Accounting and Management, 2(2), 1-7.
31. Santhoshkumar, B. (2021). A Study on Cost volume profit analysis of Sri Jayashree food corn Products. International Journal of Innovative Research in Technology, 7(12), 145-149.
32. Stefan, D. (2012). Developing a cost-volume-profit model in production decision system based on MAD real options model. Procedia Economics, 3, 350-354.
33. Waihenya, C. (2019). Effects of managerial accounting practices on financial performance: a case of manufacturing firms in industrial area, Nairobi. Unpublished Research Project Submitted to United States International University – Africa.
How to Cite
Nworie, G. O., Okafor, T. G., Igwebuike, C. C., & Innocent, D. O. C. (2023). 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. https://doi.org/10.17605/OSF.IO/R3AT4