Cost-volume-profit (CVP) analysis provides a model of the relationships between volume sold, costs incurred and profit realized. It relies upon the distinction between variable costs and fixed costs, which is made on the sole basis of volume. There are several forms of this model, including: the basic model, established for single-product firms; an adaptation of this model for companies producing multiple products; several more sophisticated 'probabilistic' models. CVP analysis enables the economic evaluation of short-run decisions. It relies upon simple hypotheses, which necessarily distance the model from reality and thus need validating before relevant usage.

The development of new management forms, especially in the field of industrial organization, makes the validity of these hypotheses more and more open to question. The basic distinction between variable and fixed costs was indeed consistent with a former strategic logic. The emergence of new approaches has given rise to the search for new cost behaviour patterns and new cost analysis methods. Activity-based costing may be viewed as an enlargement and an enrichment of the basic CVP model, which none the less retains a certain conceptual value.