1 / 10

# Study Unit 8 - PowerPoint PPT Presentation

Study Unit 8. CVP Analysis and Marginal Analsyis. SU- 8.1 – Cost-Volume-Profit (CVP) Analysis - Theory. CVP = Break-even analysis Allows us to analyze the relationship between revenue and fixed and variable expenses It allows us to study the effects of changes in Sales volume Sales price

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.

## PowerPoint Slideshow about 'Study Unit 8' - tovi

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.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

### Study Unit 8

CVP Analysis and Marginal Analsyis

• CVP = Break-even analysis

• Allows us to analyze the relationship between revenue and fixed and variable expenses

• It allows us to study the effects of changes in

• Sales volume

• Sales price

• Product mixes

• What else……?

• CVP analysis is done with what assumptions?

• What is the break-even point and where is it on a graph?

Continue

• Other terms and def.

• Margin of safety

• Mixed costs

• Revenue or sales mix

• Sensitivity analysis

• Unit Contribution Margin (UCM)

Continued

• Break-even point in units

Fixed costs

UCM

• Break-even point in dollars

Fixed costs

CMR

• Review of questions:

• 1 – Diff. gross margin and contribution margin

• 5 – Effect of an increase in CM

• 6 – Effects on BEP by changes in CM

SU – 8.2 CVP Analysis – Basic Calculations

• Problems

• 8, 9, 12 & 13 on page 330

SU – 8.3 CVP Analysis – Target Income Calculations

• Target Operating Income

Fixed costs + Target operating income

UCM

• Target Net Income

Fixed costs + Target net income / (1.0 – tax rate)

UCM

• Problem 15, 16 and 18 on page 333

SU – 8.4 CVP Analysis – Multiproduct Calculations

• Multiple Products (or Services)

S = FC + VC

• Choice of Product decisions

• Special Orders

• Accounting Costs vs. Economic Costs

• Explicit vs. Implicit Costs

• Accounting vs. Economic Profit

• Marginal Revenue and Marginal Cost

• Profit Maximization

• Short-Run Cost Relationship

SU 8.6 Short-run Profit Maximization

• Pure Competition

• Monopoly

• Monopolistic Competition

• Oligopoly

Quiz questions