TAILIEUCHUNG - Management accounting: Information for creating and managing value (4/e): Chapter 18 - Kim Langfield-Smith, Helen Thorne

Chapter 18 - Cost volume profit analysis. This chapter presents the following content: Cost volume profit (CVP) analysis, the break-even point, formulas, terminology, graphing cost volume profit relationships, profit volume (PV) graph, target net profit,. | Chapter 18 Cost volume profit analysis 18- Cost volume profit (CVP) analysis A technique used to determine the effects of changes in an organisation’s sales volume on its costs, revenue and profit Can be used in profit-seeking organisations and not-for-profit organisations Not confined to profit-seeking enterprises Commonly used in many not-for-profit situations 18- The break-even point The volume of sales where the total revenues and expenses are equal, and the operation breaks even At this level of sales, there is no profit or loss Can be calculated for an entire organisation or individual projects 18- Formulas 18- Terminology Contribution margin (or variable costing) statement A profit report where costs are reported by cost behaviour and a contribution margin is calculated Fixed and variable costs are separated Total contribution margin The difference between the total sales revenue and the total variable costs The amount available to cover fixed costs and then contribute to profits continued 18- Terminology Unit contribution margin The difference between the sales price per unit and the variable cost per unit Contribution margin ratio The unit contribution margin divided by the unit sales price The proportion of each sales dollar available to cover fixed costs and earn a profit Contribution margin percentage The contribution margin ratio multiplied by 100 The percentage of each sales dollar available to cover fixed costs and earn a profit 18- Graphing cost volume profit relationships Shows how costs, revenue and profits change as sales volume changes Five steps Draw the axes of the graph Draw the fixed expense line Draw the total expense line Draw the total revenue line Break-even point—where the total revenue and total expense lines intersect 18- 18- Profit volume (PV) graph Shows the total amount of profit or loss at different sales volumes The graph intercepts the vertical axis at the amount equal to the fixed costs The .

• Ngân hàng - Tín dụng
• Management accounting
• Lecture Management accounting
• Management accounting information
• Managing value
• Cost volume profit analysis
• Break even point
• Financial accounting
• Management accountants
• Business environment
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• Nature of management accounting
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• Advanced fraud
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• F2 Management Accounting
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• Lecture Advanced management accounting
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