《Management Accounting 7th管理会计 Don R.Hansen》ch16.pptVIP

Chapter 1 - Profit-Volume Graph Margin of Safety Assume that a company has the following projected income statement: Sales $100,000 Less: Variable expenses 60,000 Contribution margin $ 40,000 Less: Fixed expenses 30,000 Income before taxes $ 10,000 Degree of Operating Leverage (DOL) DOL = $40,000/$10,000 = 4.0 Degree of Operating Leverage (DOL) Proof: Sales $125,000 Less: Variable expenses 75,000 Contribution margin $ 50,000 Less: Fixed expenses 30,000 Income before taxes $ 20,000 CVP and ABC CVP and ABC Now suppose that sales are 25% higher than projected. What is the percentage change in profits? Percentage change in profits = DOL x percentage change in sales Percentage change in profits = 4.0 x 25% = 100% Assume the following: Sales price per unit $15 Variable cost 5 Fixed costs (conventional) $180,000 Fixed costs (ABC) $100,000 with $80,000 subject to ABC analysis Other Data: Unit Level of Variable Activity Activity Driver Costs Driver Setups $500 100 Inspections 50 600 BEP = $180,000 ÷ $10 = 18,000 units 1. What is the BEP under conventional analysis? 16 -* Cost-Volume-Profit Analysis: A Managerial Planning Tool CHAPTER 1. Determine the number of units that must be sold to break even or earn a target profit. 2. Calculate the amount of revenue required to break even or to earn a targeted profit. 3. Apply cost-volume-profit analysis in a multiple-product setting. 4. Prepare a profit-volume graph and a cost-volume-profit graph, and explain the meaning of each. Objectives After studying this chapter, you should be able to: 5. Explain the impact of risk, uncertainty, and changing variables on cost-volume-profit analysis. 6. Discuss the impact of activity-based costing on cost-volume-profit analysis Objectives Using Operating Income in CVP Analysis Narrative Equation Sales revenue – Variable expenses – Fixed expenses = Operating income Using Operating Inco