Business managers should take some aspects into consideration while implementing CVP analysis in decision making. The disadvantages of CVP analysis are listed as follows:

• The variable and fixed cost classification used in CVP analysis may not reflect the truth. This can make the managers take wrong decisions.
• Most of the fixed cost factors have the feature of semi-variable cost. This can be ignored in the analysis.
• It is assumed that the total revenue and total cost are linear. In fact, this relationship is not linear or is about to be linear in most businesses.
• The errors in the analysis can be caused due to market conditions.
• If numerous products are produced, the determination of their contribution to total sales will be hard. This may cause errors in the results of the analysis.
• As a product contributes the production of other products, a great number of production is made. Thus, there would be difficulties in determining the cost of the products.