Chapter 8: Cost-Volume-Profit Analysis. Using Cost-Volume-Profit (CVP) Analysis allows a manager to graphically analyze the relationship between Costs, Volume and Profit. The Break-Even Point is the volume of activity where the company’s revenues are equal to expenses.
Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.
Break Even Point
For 7,000 tickets
Fixed expenses + Target net profit = Number of sales units required
Unit contribution margin to earn target net profit
Fixed expenses + Target net profit = Dollar sales required to earn
Contribution margin ratio target net profit
Budgeted sales revenue - break-even revenue = Safety margin
Fixed expenses = Break-even point (in units)
Unit contribution margin
Make sure that the Bala’s Beer Company practice problem from course pack is included after this slide.