THE ROLE OF COST VOLUME PROFIT ANALYSIS ON THE MANAGERIAL DECISION-MAKING IN MANUFACTURING FIRMS IN MOGADISHU – SOMALIA

Abstract
The Purpose: The study examined at how manufacturing firms used cost-volume-profit analysis while making
managerial Decisions. Design, Methodology, and Approach: An online survey and a quantitative
methodological approach were used to gather the study's primary data. The target market consists the
Manufacturing Firms in Mogadishu, Somalia. 88 respondents who worked in the accounting and finance
departments of manufacturing firms provided the information. The data were examined using the regression
method of data analysis and the social science statistical program SPSS (version 24). Findings: The study showed
the importance of cost volume profit analysis in any production firm's decision-making. The results also show a
positive relationship between unit variable cost and managerial decision-making, as well as a significant
relationship between total revenue and managerial decision-making. These findings suggest that manufacturing
firms should use their understanding of cost volume profit analysis when making managerial decisions. Finally,
the researchers suggested that Manufacturing firms look at their CVP analysis, which consists of (unit variable
cost and total revenue), and analyze it effectively before undertaking managerial decisions in order to attain an
effective profit. They also suggested that results from cost volumes analysis of a firm should be put into practice
in order to ensure that the firm does not lose in their cost of production.
Keywords: total revenue, total variable costs, cost volume profit analysis, and managerial decision-making