One of the purposes of enterprises engaged in production and operation is to make profits. For taxpayers, taxation is a part of expenditure. Therefore, just as enterprises save expenses and costs, in order to make profits, enterprises begin to save taxes, which is also commonly known as tax planning. There are many connections and similarities between tax planning and the basic decision analysis method in management accounting-cost-volume-profit analysis.
This paper puts forward some views on the influence of tax cost behavior in cost-volume-profit analysis. Cost-volume-profit analysis is a technical method that divides costs into fixed costs and variable costs, and makes predictions and decisions according to the relationship among costs, business volume and profits under the assumption that production and sales are consistent.
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In real economic life, the relationship among cost, sales volume, price and profit is very complicated. For example, the relationship between cost and business volume may be linear or nonlinear.
The relationship between sales revenue and sales volume is not necessarily linear, because the sales price may change. In order to establish the theory of cost-volume-profit analysis, we must make some basic assumptions about the above complex relationship, thus strictly limiting the scope of cost-volume-profit analysis. For those who do not meet these basic assumptions, we can carry out cost-volume-profit analysis.
Because cost-volume-profit analysis is developed on the basis of cost behavior analysis, the basic assumption of cost behavior analysis becomes the basic assumption of cost-volume-profit analysis, that is, within the relevant range, the total fixed cost remains unchanged, and the total variable cost changes directly with the change of business volume. The former is expressed by mathematical model as y=a, and the latter is expressed by mathematical model as y=bx.
The total cost is linear with the volume of business, that is, y=a+bx. Accordingly, assuming that the sales price remains unchanged within the relevant range, there is also a linear relationship between sales revenue and sales volume, which is expressed as a straight line by a mathematical model, and the slope of the sales price is y=px(p is the sales unit price). In this way, within the relevant range, the cost and sales revenue are displayed as straight lines.
Baidu Encyclopedia-Cost-Volume-Profit Analysis