When doing cost volume profit analysis, the starting point is always to analyse the cost behaviours in relation to activity levels.

Cost Volume Profit Analysis

A financial analysis method used to determine how changes in costs and volume affect a company's operating income and net income.

Cost Behaviours

The way in which different costs change in response to variations in the level of business activity or production volume.

Activity Levels

Refers to the quantity of work performed or production completed in a business within a specific period.