Short- and Medium-Term Managerial Decision-Making: Application of the Cost-Volume-Profit Model and Its Economic Implications

Abstract

The management decisions oriented to the economic implication that generate the income, costs and expenses in the performance of a company, should not be slightly considered. It is important the use of economic or financial models as tools of help in the generating of your profits. This bibliographic analysis provides to the people responsible for managing a company an idea of the importance of the volume-cost-utility model in determining the balance point and the objective utility in a planned manner. For example, the application of the model is explained by some examples that will be of management orientation. Finally, these examples show advantages in making decisions in the short and medium term, however, this model also generates inconveniences. So, the management will always be the one who will make the decision of its use according to the scope that it wishes.