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Chapter Seven: Cost-Volume-Profit Analysis
Chapter Seven: Cost-Volume-Profit Analysis
Cost-Volume-Profit Analysis
Blocher,Stout,Cokins,Chen, Cost Management 4e ©The McGraw-Hill Companies
2008
4
CVP Analysis
or
Sales = Fixed costs + Variable costs + Operating profit
or
(Units sold x unit sp) = Fixed costs + (Units sold x Unit v.c.) + Operating profit
(p x Q) = F + (v x Q) + N
Where:
Q = units sold
p = unit selling price
F = total fixed cost
v = unit variable cost
N = operating profit
Blocher,Stout,Cokins,Chen, Cost Management 4e ©The McGraw-Hill Companies
2008
8
– Contribution margin:
p x Q = (v x Q) + F + N
p x Q = (v x Q) + F
F = total fixed cost, N = operating profit
2) B/E in sales dollars (Y = sales in dollars) :
Y = [(v/p ) x Y ] + F + N
Y = [(v/p ) x Y ] + F
Blocher,Stout,Cokins,Chen, Cost Management 4e ©The McGraw-Hill Companies
2008
14
Q= F
p -v
4) B/E in sales dollars (Y):
Y= F
(p - v )/p
p x Q =( v x Q) + F + N
$75 x Q = ($35 x Q) + $5,000 + $0
($75 - $35) x Q = $5,000
Q = $5,000/($75 - $35)
Q = $5,000/$40 = 125 units per month
Y = [(v/p ) x Y] + F + N
Y = [(v/p ) x Y] + F + N
Y = [($84,000/$180,000) x Y] + $5,000 + $0
Y = [0.4667 x Y] + $5,000
Y = $9,375 per month
Q=
F +N
p -v
Assume the management accountant is using
the contribution margin method to analyze the
breakeven point (in units) of HFI's sale of TV tables:
Q= F +N
p -v
Q= $5000 + $0
($75 - $35)
Q = 125 units per month
Blocher,Stout,Cokins,Chen, Cost Management 4e ©The McGraw-Hill Companies
2008
19
Y= F +N
(p - v )/p
Y = $5000 + $0
($75 - $35)/$75
Y = $5000 + $0
0.5333
Y = Batas
$9,375 per
kelas V . A
month
Blocher,Stout,Cokins,Chen, Cost Management 4e ©The McGraw-Hill Companies
2008
21
Q = F +N
p -v
Q = $60,000 + $48,000
$75 - $35
Q = 2,700 units per year
In sales dollars the result is
p x Q = $75 x 2,700
p x Q = $202,500 per year
Blocher,Stout,Cokins,Chen, Cost Management 4e ©The McGraw-Hill Companies
2008
24
Q = $10,000/$5
Q = 2,000 units
Blocher,Stout,Cokins,Chen, Cost Management 4e ©The McGraw-Hill Companies
2008
26