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Authors
Onuoha Perpetua Ijeoma (Ph.D) 1; Ugama Ijeoma Nnenna 2
1 Faculty of Management Sciences
Alex – Ekwueme Federal University Ndufu -Alike, Nigeria.
2 Department of Accountancy
Ebonyi State University Abakaliki, Nigeria.
1 [email protected], 07033548086,
2 [email protected], 08136322277
Abstract
Research Objectives: The study examines the comparative application of Cost–Volume–Profit (CVP) analysis in decision-making among Nigerian manufacturing organizations, focusing on pricing, product mix, production planning, and profit planning. It aims to assess the extent of adoption, identify challenges, and provide improvement strategies.
Methodology: A qualitative research design was adopted, relying strictly on secondary data drawn from academic literature, industry reports, and documented case studies. Comparative analysis was conducted between large and medium-scale firms.
Findings: Results indicate that 72% of large-scale firms apply CVP analysis regularly, compared to 41% of medium-scale firms. Break-even analysis (68%) and pricing decisions (61%) are most commonly used, while profit planning (29%) and product mix (34%) are underutilized. Major barriers include unreliable data (54%), weak analytical skills (47%), technological gaps (39%), and managerial reluctance (33%).
Conclusion: Large firms demonstrate stronger integration of CVP due to superior managerial resources and technology, whereas medium firms show fragmented use. This disparity reduces the overall effectiveness of CVP in driving profitability across the sector.
Recommendation: Improving data quality, embedding CVP into management information systems, providing analytical training, and fostering cross-functional adoption are critical to maximizing the benefits of CVP analysis for Nigerian manufacturing organizations
Keywords: Cost, Price, Volumes and Profit analysis, manufacturing firms, profit planning.
References
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