Cvp chae (presentation)-1
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This document provides an analysis of cost-volume-profit (CVP) for Best Bikes. It includes the following key points: 1) To earn a before-tax profit of $96,000, Best Bikes must generate $480,000 in sales revenue by selling 800 bikes. 2) To earn an after-tax profit of $96,000 with a 40% tax rate, Best Bikes must generate $736,200 in sales revenue by selling 1,227 bikes. 3) Best Bikes' break-even point is 160 bikes or $96,000 in sales revenue.
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This document provides an overview of cost-volume-profit (CVP) analysis for Wind Bicycle Co. It includes:
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This document provides information about cost-volume-profit (CVP) analysis for Wind Bicycle Co. It includes the company's contribution income statement for the month of June showing sales of 500 bikes for $250,000, variable expenses of $150,000, contribution margin of $100,000, fixed expenses of $80,000 and net income of $20,000. It then discusses various CVP concepts including contribution margin, break-even point, margin of safety, operating leverage and sales mix. Formulas and examples are provided to demonstrate how to calculate items like break-even point in units and dollars, target profit levels, degree of operating leverage and sales mix impact on break-even analysis.
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This document provides an overview of cost-volume-profit (CVP) analysis for Wind Bicycle Co. It includes:
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2) Explanations and examples of how contribution margin is used to cover fixed costs and contribute to profit. The break-even point is calculated as 400 units when fixed costs equal contribution margin.
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No, the increase in the advertising budget should not be authorized based on the information provided. While sales would increase by 40 units from 500 to 540 bikes, generating an additional $8,000 in contribution margin, the $10,000 increase in the fixed advertising expense would result in a $2,000 decrease in net operating income. The increase in sales does not cover the increase in fixed costs, so profitability would decline.
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The document discusses various scenarios involving changes to sales volume, costs, prices, and expenses for a company that sells speakers. It analyzes how these changes would impact contribution margin and net operating income. Specifically:
1) Increasing the advertising budget by $10,000 could increase monthly sales by $30,000 units and contribution margin by $12,000, exceeding the $10,000 extra spent on advertising.
2) Using higher quality components could increase contribution margin by $3,200 despite higher variable costs per unit.
3) Lowering prices to sell more speakers could increase volume but reduce contribution margin and net operating income if the increase in fixed costs from selling more units exceeds the increased contribution margin
Analisis Hubungan Biaya, volume, laba
This document discusses cost-volume-profit (CVP) analysis, which estimates how changes in costs and sales volume affect profits. CVP analysis can determine the break-even point, or volume needed to cover total costs. It examines the relationship between a company's costs, sales volume, and profits. The document defines CVP analysis elements like price, volume, variable and fixed costs. It also discusses concepts like contribution margin, break-even analysis, and how CVP can be used to reach profit targets or analyze products.
BEA Tutorial Final.ppt
This tutorial provides an overview of breakeven analysis, including: defining breakeven analysis as a tool to determine the sales volume needed to cover total costs; explaining the concepts of fixed costs, variable costs, revenue, and profit; demonstrating how to calculate the breakeven point using an example of a burger business; and concluding that breakeven analysis is a simple tool to determine if a product is priced correctly and how fixed costs, price, and sales volume impact profits.
Total revenue cost volume and even break relationship.pptx
This document summarizes a presentation on cost-volume-profit (CVP) analysis and project management. It defines key CVP terms like contribution margin, break-even point, target volume, and margin of safety. Formulas are given for calculating break-even volume and sales. The effects of different cost structures and product mixes on break-even are explored. Graphs and examples illustrate how to use CVP analysis to evaluate decisions. Limitations of CVP analysis and how modern software addresses them are also discussed.
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[To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
This PowerPoint compilation offers a comprehensive overview of 20 leading innovation management frameworks and methodologies, selected for their broad applicability across various industries and organizational contexts. These frameworks are valuable resources for a wide range of users, including business professionals, educators, and consultants.
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Cvp chae (presentation)-1
- 1. COST-VOLUME-PROFIT (CVP) ANALYSIS Best Bikes
- 2. COST-VOLUME-PROFIT (CVP) 1. How much sales-revenue must be generated to earn a before-tax profit $96,000? 2. How much sales-revenue must be generated to earn an after-tax profit of $96,000 and a 40% marginal tax rate? 3. What is the break-even point?
- 3. CVP: Equation Profits = (Sales – Variable expenses) – Fixed expenses OR Sales = Variable expenses + Fixed expenses + Profits At the break-even point profits equal zero
- 4. Assume the following: Monthly fixed costs: $24,000. Rent $7000 Insurance $3000 Electricity $4000 Maintenance $2000 Indirect labor $4000 Misc. fixed costs: $4000 Monthly variable costs: $450 Pedals $50 Brakes $20 Wheels $50 Seats $20 Headsets $30 Other direct materials $200 Direct labor $80
- 5. CV P - 5 CVP Assume the following: Total Per unit %of Sales Sales (800 Bikes) $480,000 $600 100% Less: Variable Expenses $360,000 $450 75% Contribution Margin $120,000 $150 25% Less Fixed Expenses $24,000 Net Income $96,000
- 6. Revenue before tax profit Sales = Variable expenses + Fixed expenses + Profits $600Q = $450Q + $24,000 + $96,000 Q = $120,000 / $150 = 827 Q = 800 bikes $800 X $600 = $480,000 required sales How much sales-revenue must be generated to earn a before tax profit $96,000?
- 7. Revenue after-tax profit $600Q - $450Q - $24,000 = $96,000 / (1 -0.4) 150Q = $184,000 = 1227 Bikes Sales = 1227 X $600 = $736,200 Sales required How much sales-revenue must be generated to earn after-tax profit of $96,000 and a 40% marginal tax rate?
- 8. Break-Even Analysis Sales = Variable expenses + Fixed expenses + Profits X = 0.75X + $24,000 + $0 X = 24,000 / 0.25 = $96,000 BEP: $96,000 / $600 = 160 Bikes Where: X = Total sales dollars 0.75 = Variable expenses as a % of sales $24,000 = Total fixed expenses
- 9. Break-Even Point $500,000 $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 Break-Even Point Units How many bikes to sell to make break-even? 160 Bikes Sales FC Total Costs
- 10. Data: Break-Even Analysis time Unit Start Unit Incre Unit Price Unit VC Total FC month 0 70 600 450 24,000 Units Sales VC CM FC Total Costs Net Inc 0 $0 $0 $0 $ 24,000 $ 24,000 -24,000 70 $ 42,000 $ 31,500 $ 10,500 $ 24,000 $ 55,500 -13,500 140 $ 84,000 $ 63,000 $ 21,000 $ 24,000 $ 87,000 -3,000 210 $ 126,000 $ 94,500 $ 31,500 $ 24,000 $ 118,500 7,500 280 $ 168,000 $ 126,000 $ 42,000 $ 24,000 $ 150,000 18,000 350 $ 210,000 $ 157,500 $ 52,500 $ 24,000 $ 181,500 28,500 420 $ 252,000 $ 189,000 $ 63,000 $ 24,000 $ 213,000 39,000 490 $ 294,000 $ 220,500 $ 73,500 $ 24,000 $ 244,500 49,500 560 $ 336,000 $ 252,000 $ 84,000 $ 24,000 $ 276,000 60,000 630 $ 378,000 $ 283,500 $ 94,500 $ 24,000 $ 307,500 70,500 700 $ 420,000 $ 315,000 $ 105,000 $ 24,000 $ 339,000 81,000 770 $ 462,000 $ 346,500 $ 115,500 $ 24,000 $ 370,500 91,500