3 cost volume profit analysis
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3. Cost-Volume-Profit Analysis. Hanif Kanjer Dean, Rustomjee Business School. Index. Contribution Margin Contribution margin per unit Contribution margin % Profit-Volume Graphs Break-even Analysis Margin of Safety Sensitivity Analysis Solved Examples. E.g. 3-20, Pg 112

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3. Cost-Volume-Profit Analysis

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3 cost volume profit analysis

3. Cost-Volume-Profit Analysis

Hanif Kanjer

Dean, Rustomjee Business School


Index

Index

  • Contribution Margin

  • Contribution margin per unit

  • Contribution margin %

  • Profit-Volume Graphs

  • Break-even Analysis

  • Margin of Safety

  • Sensitivity Analysis

  • Solved Examples


3 cost volume profit analysis

  • E.g. 3-20, Pg 112

    Contribution & Operating Income

    Break-even point in Revenues

    Break-even point in units

The Doral Company manufactures and sells pens.

Sales: 5,000,000 units @ $0.50per unit.

Fixed costs $900,000/yr

Variable costs are $0.30/yr


3 cost volume profit analysis

E.g. 3-20, Pg 112


3 cost volume profit analysis

E.g. 3-20, Pg 112


Delicious donuts 1

Delicious Donuts - 1

E.g. 3-19, Page 112,


Delicious donuts 2

E.g. 3-19, Page 112

Delicious Donuts - 2


3 cost volume profit analysis

Break-even Point

E.g. 3-21, Pg 112

Sanborn Motors is a small-car dealership.Sells a car for $29,000 per monthPurchases the car for $25,000 per monthPays $65,000 in rent & utilities, $75,000 for sales people’s salaries.Sales people are paid a commission of $600 per car they sell.Sanborn spends $12,000 each month for local advertising.Its tax rate is 25%Find the Break-even point


3 cost volume profit analysis

Break-even Point and income taxes

E.g. 3-21, Pg 112

To achieve a target monthly net income of $69,000, how many cars should be sold?

Total Amount

1,027,000

302.06

935,000

92,000

23,000

69,000

302.06


Break even analysis

Break-even Analysis


Break even graph

Break-even Graph


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