Cost-volume-profit (CVP) analysis explains the impact of changes in selling prices, sales volume, variable costs, and fixed costs on net profit. It helps determine the effect of changing one factor on the others. Contribution is defined as sales minus variable costs and represents the amount available to cover fixed costs and profits. The profit-volume (P/V) ratio expresses the relationship between contribution and sales and can be used to calculate break-even point, profit at a given sales level, sales needed for a target profit, and the effect of a price reduction. The break-even point is the sales level where total costs equal total revenues, meaning no profit or loss. Margin of safety is the difference between