Cost-volume-profit (CVP) analysis and costing for the 21st century has evolved into a very complex and difficult paradigm. Even the most gifted accountants find that grasping the overall concept of business accounting can be very overwhelming and difficult. Yet understanding such a fundamental principle can allow businesses to grow in ways that other, less educated businesses could never dream of achieving, while simultaneously understanding the “bottom line.” In this article, we will discuss costing in the 21st century, other relevant costing methods, and the relevance of CVP in today's workplace. Before critiquing and analyzing the CVP, it is important to have a good understanding of what it does for a business and the accountant. . Cost-volume-profit analysis is also known as contribution margin analysis, which is the percentage of sales after subtracting variable costs (Toolkit, ND). When you use the CVP method, you use variable costs and fixed costs to determine the profit of the company and products. Variable costs are those that vary based on the volume created and sold and other external factors that can change on a daily basis. Fixed costs are those that remain constant, regardless of the quantity of product created or sold. Using variable and fixed costs, an accountant can find a company's break-even point, where cost equals revenue. Yet, as simple as the concept may seem, the difficulties involved in defining these variables, as a fixed number, are what make this tool truly difficult to master. The question now is whether CVP is a good model for all businesses, especially evolving ones. in the 21st century? Kirshan Gupta argues that the modern business is shifting focus towards a more customer-focused approach...... middle of paper ......h.com/online-accounting-course/35Xpg01.htmlKrishan M Gupta and A Gunasekaran . (2005). Costing in the new business environment: a challenge for management accounting researchers and practitioners. Journal of Management Auditing, 20(4), 337-353. Retrieved March 12, 2011 from ABI/INFORM Global. (Document ID: 875490591). Martin, J (ND), Management and accounting. Retrieved February 2, 2011 from: http://maaw.info/Chapter11.htm#The%20Controversy%20over%20the%20contribution%20margin%20approachSba, Cost-Volume-Profit-Analysis, retrieved March 12, 2011 from: http: / /www.sba.pdx.edu/faculty/michaels/360/11ch03/sld001.htmToolkit, Contribution Margins, retrieved November 15, 2010 from: http://www.toolkit.cch.com/text/P06_7520.aspTripod, Calculation of break-even point and contribution margin, retrieved March 12, 2011 from: http://members.tripod.com/devryproject/BreakEven.htm