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# Mod9 b av3

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### Mod9 b av3

1. 1. Module 9BA VOLUME-COST-PROFIT (PRICE AND UNIT COST) OBJECTIVE: This program computes a simple break-even quantity and break-even revenue when price, variable cost per unit and total fixed cost are given. The break-even point with a required profit and the degree of operating leverage can also be calculated at any quantity other than the break-even point. BREAK-EVEN ANALYSIS Sample data have been entered as an example. A graph can be viewed by pressing GRAPH INPUTS (will appear in blue): (located at the bottom of the screen). 1) Price, variable cost/unit and fixed cost are entered in cells D14, D15 and D16, Price per unit 5 respectively. Variable cost per unit 3 2) Required profit is entered in cell E33 Total fixed cost 40,000 to obtain the quantity required to achieve a desired profit. 3) Quantity at which the degree of Break-even quantity 20,000 operating leverage is to be calculated is Break-even revenue 100,000 entered in cell E37. Total Variable Total Units Fixed Cost Cost Cost Rev. Profit 0 40,000 0 40,000 0 -40,000 10,000 40,000 30,000 70,000 50,000 -20,000 20,000 40,000 60,000 100,000 100,000 0 30,000 40,000 90,000 130,000 150,000 20,000 40,000 40,000 120,000 160,000 200,000 40,000 50,000 40,000 150,000 190,000 250,000 60,000 60,000 40,000 180,000 220,000 300,000 80,000 70,000 40,000 210,000 250,000 350,000 100,000 80,000 40,000 240,000 280,000 400,000 120,000 Quantity needed to achieve required profit Required profit: 45,000 Quantity needed: 42,500 Calculate Degree of Operating Leverage Specify Quantity: 45,000 Answer: 1.8
2. 2. VOLUME-COST-PROFIT ANALYSIS 500,000 400,000 300,000 DOLLARS 200,000 100,000 0 -100,000 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 UNITS Column E Column D Column F