Cost Volume Profit Analysis

Manufacturing Enterprice Capacity

A B
Fixed cost $ 350,000.00 170,000.00
Unit Variable Cost $/uop 5.00 25.00

Market demand uop 85,000.00

Total cost $ 775,000.00 2,295,000.00

Q F3=F2 70,000.00
Q F2=F1

Step 500

Quantity A B C
500 352,500.00 182,500.00 120,000.00
1000 355,000.00 195,000.00 140,000.00
1500 357,500.00 207,500.00 160,000.00
2000 360,000.00 220,000.00 180,000.00
2500 362,500.00 232,500.00 200,000.00
3000 365,000.00 245,000.00 220,000.00
3500 367,500.00 257,500.00 240,000.00
4000 370,000.00 270,000.00 260,000.00
4500 372,500.00 282,500.00 280,000.00
5000 375,000.00 295,000.00 300,000.00
5500 377,500.00 307,500.00 320,000.00
6000 380,000.00 320,000.00 340,000.00
6500 382,500.00 332,500.00 360,000.00
7000 385,000.00 345,000.00 380,000.00
7500 387,500.00 357,500.00 400,000.00
8000 390,000.00 370,000.00 420,000.00
8500 392,500.00 382,500.00 440,000.00
9000 395,000.00 395,000.00 460,000.00
9500 397,500.00 407,500.00 480,000.00
10000 400,000.00 420,000.00 500,000.00
10500 402,500.00 432,500.00 520,000.00
11000 405,000.00 445,000.00 540,000.00
 uop unit of product

C D
100,000.00 250,000.00
40.00 20.00

3,500,000.00 1,950,000.00 The best choice is Firm 1

D Best cost Best firm Chart Title

260,000.00 120,000.00 C
600,000.00
270,000.00 140,000.00 C
280,000.00 160,000.00 C 500,000.00
290,000.00 180,000.00 C
300,000.00 200,000.00 C 400,000.00 A A A
310,000.00 220,000.00 C B B A A
B B
320,000.00 240,000.00 C B B B
300,000.00 B
330,000.00 260,000.00 C C
C
C
340,000.00 280,000.00 C 200,000.00 C
C
350,000.00 295,000.00 B C
C
C
360,000.00 307,500.00 B 100,000.00
C
370,000.00 320,000.00 B
380,000.00 332,500.00 B -
390,000.00 345,000.00 B 0 2000 4000 6000 8000 10000 12000

400,000.00 357,500.00 B A B C
410,000.00 370,000.00 B D Best cost
420,000.00 382,500.00 B
430,000.00 395,000.00 A
440,000.00 397,500.00 A
450,000.00 400,000.00 A
460,000.00 402,500.00 A
470,000.00 405,000.00 A
 A A A A A
B B

10000 12000
Costing
INPUTs
Machine shop
Total $
A$
Indirect wages $ 78,560 8,586
Consumable materials $ 16,900 6,400
Rent and rates $ 16,700
Buildings insurance $ 2,400
Power $ 8,600
Heat and light $ 3,400
Depreciation (machinery) $ 40,200
Value of machinery $ 402,000 201,000
Power usage (%) % 100 55%
Direct labour (hours) hours 35,000 8,000
Machine usage (hours) hours 25,200 7,200
Area (sq ft) sq ft 45,000 10,000
100% 22%

Allocating expese

Total $ A

Indirect wages 78,560 8,586

Consumable materials 16,900 6,400
Rent and rates 16,700 3711.11
Buildings insurance 2,400 533.33
Power 8,600 4730
Heat and light 3,400 755.56
Depreciation (machinery)
40,200 20100
44,816
Machine shop
Assembly $ Canteen $ Maintenance $
B$
9,190 15,674 29,650 15,460
8,700 1,200 600

179,000 22,000
40% 3% 0% 2%
6,200 20,800
18,000
12,000 15,000 6,000 2,000
27% 33% 13% 4%

Basic of
Assembly
B Maintenance apportionm
Canteen
ent

9,190 15,674 29,650 15,460 Actual

8,700 1,200 600 0 Actual
4453.33 5566.67 2226.67 742.22 Area
640.00 800.00 320.00 106.67 Area
3440 258 0 172 Power usage
906.67 1133.33 453.33 151.11 Area

17900 2200 0 0 Value of machine

45,230 26,832 33,250 16,632