2010本—量—利关系.ppt

Lecture 2Topic 3: Cost-Volume-Profit Relationships COST VOLUME PROFIT (CVP) ANALYSIS  Shows how alternate actions can affect profit. Focuses on the relationship between cost, volume and profit. It enables us to: (1) determine the break-even level of production, and (2) predict how changes in the level of production, selling price or costs will affect profit The Basics of Cost-Volume-Profit Analysis The Basics of Cost-Volume-Profit Analysis The Basics of Cost-Volume-Profit Analysis The Contribution Approach For each additional unit Wind sells, $200 more in contribution margin will help to cover fixed expenses and profit. The Contribution Approach Each month Wind must generate at least $80,000 in total CM to break even. The Contribution Approach If Wind sells 400 units in a month, it will be operating at the break-even point. The Contribution Approach If Wind sells one more bike (401 bikes), net operating income will increase by $200. CVP Relationships in Graphic Form Viewing CVP relationships in a graph is often helpful. Consider the following information for Wind Co.: CVP Graph CVP Graph Contribution Margin Ratio The contribution margin ratio is:D驾驶证能开什么车 /chexing/d.html 驾驶员之家For Wind Bicycle Co. the ratio is: Contribution Margin Ratio Or, in terms of units, the contribution margin ratio is:For Wind Bicycle Co. the ratio is: Contribution Margin Ratio At Wind, each $1.00 increase in sales revenue results in a total contribution margin increase of 40￠. If sales increase by $50,000, what will be the increase in total contribution margin? E驾驶证能开什么车 /chexing/ce.html 驾驶员之家 Contribution Margin Ratio Contribution Margin Ratio Quick Check ? Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the CM Ratio for Coffee Klatch? a. 1.319 b. 0