Part Five. Cost Volume Profit Analysis

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "Part Five. Cost Volume Profit Analysis"

Transcription

1 Part Five Cost Volume Profit Analysis

2 COST VOLUME PROFIT ANALYSIS Study of the effects of changes of costs and volume on a company s profits A critical factor in management decisions Important in profit planning

3 COST VOLUME PROFIT ANALYSIS Considers the interrelationships among the five components of CVP analysis:

4 ASSUMPTIONS UNDERLYING CVP ANALYSIS(Assumptions) Behavior of both costs and revenues is linear throughout the relevant range of the activity index All costs can be classified as either variable or fixed with reasonable accuracy Changes in activity are the only factors that affect costs All units produced are sold When more than one type of product is sold, the sales mix will remain constant

5 CVP INCOME STATEMENT A statement for internal use Classifies costs and expenses as fixed or variable Reports contribution margin in the body of the statement. Contribution margin amount of revenue remaining after deducting variable costs Reports the same net income as a traditional income statement

6 CVP INCOME STATEMENT Contribution Margin Per Unit Contribution margin is available to cover fixed costs and to contribute to income Formula for contribution margin per unit: Unit Selling Price Unit Variable Costs = Contribution Margin per Unit Example: Computation for Vargo Video Unit Selling Price $500 Unit Variable Costs $300 = Contribution Margin per Unit $200

7 CVP INCOME STATEMENT Contribution Margin Ratio Shows the percentage of each sales dollar available to apply toward fixed costs and profits Contribution Margin per Unit Unit Selling Price = Contribution Margin Ratio Example: Computation for Vargo Video Contribution Margin per Unit S200 Unit Selling Price = $500 Contribution Margin Ratio 40%

8 BREAK EVEN ANALYSIS Process of finding the break even point Break even point Level of activity at which total revenues equal total costs (both fixed and variable) Can be computed or derived from a mathematical equation by using contribution margin from a cost volume profit (CVP) graph Expressed either in sales units or in sales dollars

9 BREAK EVEN ANALYSIS Mathematical Equation Example using the Vargo Video data: Sales Variable Costs $300 Q Fixed Costs $500 Q = + + $200,000 Net Income $0 = $200 Q $200,000 Q = 1000 units Where: Q = sales volume; $500 = selling price; $300 = variable cost per unit; $200,000 total fixed costs To find sales dollars required to break even: 1000 units X $500 = $500,000 (break even sales dollars)

10 Breakeven point Volume of sales needed to earn no profit or no loss Revenues = total costs Fixed cost + target profit Contribution margin per unit = number of units Fixed cost + target profit Contribution margin percentage = dollars of sales

11 The breakeven formulas allow us to play what if games What happens if Sales price is increased (or decreased) Variable costs are replaced by fixed costs Volume increases Additional amounts spent on advertising will increase sales volume Etc.

12 Margin of safety The excess of current sales volume over the breakeven point In units Current unit sales breakeven unit sales In percentage (Current sales breakeven sales) / current sales The sales figures may be in dollars or units

13 BREAK EVEN ANALYSIS Margin of Safety Difference between actual or expected sales and sales at the break even point May be expressed in dollars or as a ratio Example To determine the margin of safety in dollars for Vargo Video assuming that actual (expected) sales are $750,000: Actual (Expected) Sales S750,000 Break even Sales = $500,000 Margin of Safety in Dollars $250,000

14 BREAK EVEN ANALYSIS Margin of Safety Ratio Computed by dividing the margin of safety in dollars by the actual or expected sales (using Vargo Video data) Margin of Safety in Dollars $250,000 Actual (Expected) Sales = $750,000 Margin of Safety Ratio 33% Results indicate that Vargo Video s sales could fall by 33 percent before it would be operating at a loss. The higher the dollars or the percentage, the greater the margin of safety.

15 BREAK EVEN ANALYSIS Contribution Margin Technique At the break even point, contribution margin must equal total fixed costs (CM = total revenues variable costs) The break even point can be computed using either contribution margin per unit or contribution margin ratio When the break even point in units is desired, contribution margin per unit is used in the following formula Fixed Costs Contribution Margin per Unit = Break even Point in Units When the break even point in dollars is desired, contribution margin ratio is used in the following formula Fixed Costs Contribution Margin Ratio = Break even Point in Dollars

16 BREAK EVEN ANALYSIS Contribution Margin Technique Example using Vargo Video data: Fixed Costs $200,000 Contribution Margin per Unit = $200 Break even Point in Units 1,000 units Fixed Costs $200,000 Contribution Margin per Unit = 40% Break even Point in Dollars $500,000

17 BREAK EVEN ANALYSIS Graphic Presentation A cost volume profit (CVP) graph shows costs, volume, and profits Used to visually find the break even point To construct a CVP graph, Plot the total revenue line starting at the zero activity level Plot the total fixed cost by a horizontal line Plot the total cost line. (Starts at the fixed cost line at zero activity) Determine the break even point from the intersection of the total cost line and the total revenue line

18 BREAK EVEN ANALYSIS CVP Graph for Vargo Video

19 Cost Volume Profit Graph Sales in Dollars 450, , , , , , , ,000 50,000 Break even even point Total expenses Loss area Total sales Profit area Fixed expenses Units Sold

20 Profit Volume Graph $100,000 Some managers like the profit volume graph because it focuses on profits and volume. $80,000 Profit $60,000 $40,000 $20,000 $ $ $50 $100 $150 $200 $250 $300 $350 $400 $(20,000) $(40,000) $(60,000) $(80,000) Loss area Profit area Break even point $(100,000) Units sold (00s)

21 BREAK EVEN ANALYSIS Target Net Income Level of sales necessary to achieve a specified income Can be determined from each of the approaches used to determine break even sales/units May be expressed either in sales dollars or sales units

22 Sensitivity analysis Change in Sales Price Change in Variable Costs Change in Fixed Costs Change in Volume

23 Operating leverage Measures the relative mix of fixed and variable costs Contribution margin / operating income Can determine the change in operating income that will result from a change in sales by multiplying the % change in sales by the operating leverage High operating leverage implies high risk, high reward

24 Breakeven calculations in a multi product environment Assume the mix of products sold remains constant Determine the contribution margin for a basket of goods (the normal sales mix) Calculate the breakeven point as the number of baskets needed to break even

25 Breakeven calculations in a multi product environment Normal Contribution Total Product sales mix per unit contribution Laptops 6 $ 70 $ 420 Printers Scanners 1 20 $ If fixed costs are $800,000, the breakeven point is $800,000 / 500 = 1,600 "baskets" 9,600 laptops 3,200 printers 1,600 scanners

26 Computing Multiproduct Break Even Point Unit contribution margin is replaced with contribution margin for a composite unit. A composite unit is composed of specific numbers of each product in proportion to the product sales mix. Sales mix is the ratio of the volumes of the various products.

27 Computing Multiproduct Break Even Point The resulting break even formula for composite unit sales is: Break even point in composite units = Fixed costs Contribution margin per composite unit

28 Computing Multiproduct Break Even Point A company sells windows and doors. They sell 4 windows for every door. Windows Doors Selling Price $200 $500 Variable Cost Unit Contribution $ 75 $ 150 Sales Mix Ratio 4 1

29 Computing Multiproduct Break Even Point Step 1: Compute contribution margin per composite unit. Windows Doors Selling Price $200 $500 Variable Cost Unit Contribution $ 75 $ 150 Sales Mix Ratio Composite C/M

30 Computing Multiproduct Break Even Point Step 2: Compute break even point in composite units. Break even point in composite units = Fixed costs Contribution margin per composite unit

31 Computing Multiproduct Break Even Point Step 2: Compute break even point in composite units. Break even point in composite units Break even point in composite units = = Fixed costs Contribution margin per composite unit $900,000 $450 per composite unit Break even point in composite units = 2,000 composite units

32 Computing Multiproduct Break Even Point Step 3: Determine the number of windows and doors that must be sold to break even. Sales Composite Product Mix Units Units Window 4 2,000 = 8,000 Door 1 2,000 = 2,000

33 Multiproduct Break Even Income Statement Step 4: Verify the results. Windows Doors Combined Selling Price $200 $500 Variable Cost Unit Contribution $ $ Sales Volume 8,000 2,000 Total Contribution $ 600,000 $ 300,000 $ 900,000 Fixed Costs 900,000 Income $ 0

34 Thanks for Your Attention

Assumptions of CVP Analysis. Objective 1: Contribution Margin Income Statement. Assumptions of CVP Analysis. Contribution Margin Example

Assumptions of CVP Analysis. Objective 1: Contribution Margin Income Statement. Assumptions of CVP Analysis. Contribution Margin Example Assumptions of CVP Analysis Cost-Volume-Profit Analysis Expenses can be classified as either variable or fixed. CVP relationships are linear over a wide range of production and sales. Sales prices, unit

More information

Accounting Building Business Skills. Learning Objectives: Learning Objectives: Paul D. Kimmel. Chapter Fourteen: Cost-volume-profit Relationships

Accounting Building Business Skills. Learning Objectives: Learning Objectives: Paul D. Kimmel. Chapter Fourteen: Cost-volume-profit Relationships Accounting Building Business Skills Paul D. Kimmel Chapter Fourteen: Cost-volume-profit Relationships PowerPoint presentation by Kate Wynn-Williams University of Otago, Dunedin 2003 John Wiley & Sons Australia,

More information

Chapter 6 Cost-Volume-Profit Relationships

Chapter 6 Cost-Volume-Profit Relationships Chapter 6 Cost-Volume-Profit Relationships Solutions to Questions 6-1 The contribution margin (CM) ratio is the ratio of the total contribution margin to total sales revenue. It can be used in a variety

More information

Cost-Volume-Profit. Managerial Accounting Fifth Edition Weygandt Kimmel Kieso. Page 5-2

Cost-Volume-Profit. Managerial Accounting Fifth Edition Weygandt Kimmel Kieso. Page 5-2 5-1 Cost-Volume-Profit Managerial Accounting Fifth Edition Weygandt Kimmel Kieso 5-2 study objectives 1. Distinguish between variable and fixed costs. 2. Explain the significance of the relevant range.

More information

Break-Even Point and Cost-Volume-Profit Analysis

Break-Even Point and Cost-Volume-Profit Analysis 9 Break-Even Point and Cost-Volume-Profit Analysis Objectives After completing this chapter, you should be able to answer the following questions: LO.1 LO.2 LO.3 LO.4 LO.5 LO.6 What is the break-even point

More information

Chapter 6: Break-Even & CVP Analysis

Chapter 6: Break-Even & CVP Analysis HOSP 1107 (Business Math) Learning Centre Chapter 6: Break-Even & CVP Analysis One of the main concerns in running a business is achieving a desired level of profitability. Cost-volume profit analysis

More information

Summary. Chapter Five. Cost Volume Relations & Break Even Analysis

Summary. Chapter Five. Cost Volume Relations & Break Even Analysis Summary Chapter Five Cost Volume Relations & Break Even Analysis 1. Introduction : The main aim of an undertaking is to earn profit. The cost volume profit (CVP) analysis helps management in finding out

More information

C 6 - ACRONYMS notesc6.doc Instructor s Supplemental Information Written by Professor Gregory M. Burbage, MBA, CPA, CMA, CFM

C 6 - ACRONYMS notesc6.doc Instructor s Supplemental Information Written by Professor Gregory M. Burbage, MBA, CPA, CMA, CFM C 6 - ACRONYMS notesc6.doc Instructor s Supplemental Information ACRONYMS (ABBREVIATIONS) FOR USE WITH MANAGERIAL ACCOUNTING RELATING TO COST-VOLUME-PROFIT ANALYSIS. CM Contribution Margin in total dollars

More information

Cost-Volume-Profit Analysis

Cost-Volume-Profit Analysis Cost-Volume-Profit Analysis Cost-Volume-Profit Assumptions and Terminology 1 Changes in the level of revenues and costs arise only because of changes in the number of product (or service) units produced

More information

The term marginal cost refers to the additional costs incurred in providing a unit of

The term marginal cost refers to the additional costs incurred in providing a unit of Chapter 4 Solutions Question 4.1 A) Explain the following The term marginal cost refers to the additional costs incurred in providing a unit of product or service. The term contribution refers to the amount

More information

Breakeven, Leverage, and Elasticity

Breakeven, Leverage, and Elasticity Breakeven, Leverage, and Elasticity Dallas Brozik, Marshall University Breakeven Analysis Breakeven analysis is what management is all about. The idea is to compare where you are now to where you might

More information

Part II Management Accounting Decision-Making Tools

Part II Management Accounting Decision-Making Tools Part II Management Accounting Decision-Making Tools Chapter 7 Chapter 8 Chapter 9 Cost-Volume-Profit Analysis Comprehensive Business Budgeting Incremental Analysis and Decision-making Costs Chapter 10

More information

Costing For Decision-Making Break Even Analysis. Break-even even Analysis

Costing For Decision-Making Break Even Analysis. Break-even even Analysis Costing For Decision-Making Break Even Analysis CHAPTER 18 Introduction CVP Analysis Behaviour of Fixed and Variable Costs CVP Analysis and Break-even even Analysis Break-even even Analysis Break-even

More information

Chapter. Break-even analysis (CVP analysis)

Chapter. Break-even analysis (CVP analysis) Chapter 5 Break-even analysis (CVP analysis) 1 5.1 Introduction Cost-volume-profit (CVP) analysis looks at how profit changes when there are changes in variable costs, sales price, fixed costs and quantity.

More information

Math 1314 Lesson 8 Business Applications: Break Even Analysis, Equilibrium Quantity/Price

Math 1314 Lesson 8 Business Applications: Break Even Analysis, Equilibrium Quantity/Price Math 1314 Lesson 8 Business Applications: Break Even Analysis, Equilibrium Quantity/Price Three functions of importance in business are cost functions, revenue functions and profit functions. Cost functions

More information

CHAPTER LEARNING OBJECTIVES. Identify common cost behavior patterns.

CHAPTER LEARNING OBJECTIVES. Identify common cost behavior patterns. c04.qxd 6/2/06 2:53 PM Page 124 CHAPTER 4 LEARNING OBJECTIVES 1 2 3 4 5 6 Identify common cost behavior patterns. Estimate the relation between cost and activity using account analysis and the high-low

More information

Accounting 610 2C Cost-Volume-Profit Relationships Page 1

Accounting 610 2C Cost-Volume-Profit Relationships Page 1 Accounting 610 2C Cost-Volume-Profit Relationships Page 1 I. OVERVIEW A. The managerial accountant uses analytical tools to advise line managers in decision making functions. C-V-P (CVP) analysis provides

More information

Cost-Volume-Profit Analysis

Cost-Volume-Profit Analysis Chapter 6 Notes Page 1 Cost-Volume-Profit Analysis Understanding the relationship between a firm s costs, profits and its volume levels is very important for strategic planning. When you are considering

More information

Chapter 25 Cost-Volume-Profit Analysis Questions

Chapter 25 Cost-Volume-Profit Analysis Questions Chapter 25 Cost-Volume-Profit Analysis Questions 1. Cost-volume-profit analysis is used to accomplish the first step in the planning phase for a business, which involves predicting the volume of activity,

More information

Algebra I. In this technological age, mathematics is more important than ever. When students

Algebra I. In this technological age, mathematics is more important than ever. When students In this technological age, mathematics is more important than ever. When students leave school, they are more and more likely to use mathematics in their work and everyday lives operating computer equipment,

More information

BREAK-EVEN ANALYSIS. In your business planning, have you asked questions like these?

BREAK-EVEN ANALYSIS. In your business planning, have you asked questions like these? BREAK-EVEN ANALYSIS In your business planning, have you asked questions like these? How much do I have to sell to reach my profit goal? How will a change in my fixed costs affect net income? How much do

More information

Indiana State Core Curriculum Standards updated 2009 Algebra I

Indiana State Core Curriculum Standards updated 2009 Algebra I Indiana State Core Curriculum Standards updated 2009 Algebra I Strand Description Boardworks High School Algebra presentations Operations With Real Numbers Linear Equations and A1.1 Students simplify and

More information

House Published on www.jps-dir.com

House Published on www.jps-dir.com I. Cost - Volume - Profit (Break - Even) Analysis A. Definitions 1. Cost - Volume - Profit (CVP) Analysis: is a means of predicting the relationships among revenues, variable costs, and fixed costs at

More information

INCORPORATION OF LEARNING CURVES IN BREAK-EVEN POINT ANALYSIS

INCORPORATION OF LEARNING CURVES IN BREAK-EVEN POINT ANALYSIS Delhi Business Review Vol. 2, No. 1, January - June, 2001 INCORPORATION OF LEARNING CURVES IN BREAK-EVEN POINT ANALYSIS Krishan Rana Suneel Maheshwari Ramchandra Akkihal T HIS study illustrates that a

More information

Section 1.5 Linear Models

Section 1.5 Linear Models Section 1.5 Linear Models Some real-life problems can be modeled using linear equations. Now that we know how to find the slope of a line, the equation of a line, and the point of intersection of two lines,

More information

Managerial Accounting Prof. Dr. Vardaraj Bapat Department of School of Management Indian Institute of Technology, Bombay

Managerial Accounting Prof. Dr. Vardaraj Bapat Department of School of Management Indian Institute of Technology, Bombay Managerial Accounting Prof. Dr. Vardaraj Bapat Department of School of Management Indian Institute of Technology, Bombay Lecture - 26 Cost Volume Profit Analysis Dear participations in our early session,

More information

Variable Costs. Breakeven Analysis. Examples of Variable Costs. Variable Costs. Mixed

Variable Costs. Breakeven Analysis. Examples of Variable Costs. Variable Costs. Mixed Breakeven Analysis Variable Vary directly in proportion to activity: Example: if sales increase by 5%, then the Variable will increase by 5% Remain the same, regardless of the activity level Mixed Combines

More information

Cost-Volume-Profit Analysis: Additional Issues

Cost-Volume-Profit Analysis: Additional Issues 6-1 Cost-Volume-Profit Analysis: Additional Issues 6-2 Managerial Accounting Fifth Edition Weygandt Kimmel Kieso study objectives 1. Describe the essential features of a cost-volume-profit income statement.

More information

Part Three. Cost Behavior Analysis

Part Three. Cost Behavior Analysis Part Three Cost Behavior Analysis Cost Behavior Cost behavior is the manner in which a cost changes as some related activity changes An understanding of cost behavior is necessary to plan and control costs

More information

Exhibit 7.5: Graph of Total Costs vs. Quantity Produced and Total Revenue vs. Quantity Sold

Exhibit 7.5: Graph of Total Costs vs. Quantity Produced and Total Revenue vs. Quantity Sold 244 13. 7.5 Graphical Approach to CVP Analysis (Break-Even Chart) A break-even chart is a graphical representation of the following on the same axes: 1. Fixed costs 2. Total costs at various levels of

More information

21. Cost-volume-profit analysis

21. Cost-volume-profit analysis This book is licensed under a Creative Commons Attribution 3.0 License 21. Cost-volume-profit analysis Learning objectives After studying this chapter, you should be able to: Explain and describe cost

More information

Break-even analysis. On page 256 of It s the Business textbook, the authors refer to an alternative approach to drawing a break-even chart.

Break-even analysis. On page 256 of It s the Business textbook, the authors refer to an alternative approach to drawing a break-even chart. Break-even analysis On page 256 of It s the Business textbook, the authors refer to an alternative approach to drawing a break-even chart. In order to survive businesses must at least break even, which

More information

Session 07. Cost-Volume-Profit Analysis

Session 07. Cost-Volume-Profit Analysis Session 07 Cost-Volume-Profit Analysis Programme : Executive Diploma in Business & Accounting (EDBA 2014) Course : Cost Analysis in Business Lecturer : Mr. Asanka Ranasinghe BBA (Finance), ACMA, CGMA Contact

More information

It is important to know the following assumptions in CVP analysis before we can use it effectively.

It is important to know the following assumptions in CVP analysis before we can use it effectively. Cost-Volume-Profit analysis (Relevant to AAT Examination Paper 3 Management Accounting) Li Tak Ming, Andy, Deputy Head, Department of Business Administration, Hong Kong Institute of Vocational Education

More information

Financial Analysis, Modeling, and Forecasting Techniques

Financial Analysis, Modeling, and Forecasting Techniques Financial Analysis, Modeling, and Forecasting Techniques Course #5710A/QAS-5710A Course Material Financial Analysis, Modeling, and Forecasting Techniques (Course #5710A/QAS-5710A) Table of Contents PART

More information

CORRELATED TO THE SOUTH CAROLINA COLLEGE AND CAREER-READY FOUNDATIONS IN ALGEBRA

CORRELATED TO THE SOUTH CAROLINA COLLEGE AND CAREER-READY FOUNDATIONS IN ALGEBRA We Can Early Learning Curriculum PreK Grades 8 12 INSIDE ALGEBRA, GRADES 8 12 CORRELATED TO THE SOUTH CAROLINA COLLEGE AND CAREER-READY FOUNDATIONS IN ALGEBRA April 2016 www.voyagersopris.com Mathematical

More information

Managerial Accounting. 2011 First semester Takayuki Asada

Managerial Accounting. 2011 First semester Takayuki Asada Managerial Accounting 2011 First semester Takayuki Asada 1 Chapter4 Cost-Volume-Profit Analysis After reading this chapter, you will be able to: Identify common cost behavior patterns. Estimate the relation

More information

is the degree of the polynomial and is the leading coefficient.

is the degree of the polynomial and is the leading coefficient. Property: T. Hrubik-Vulanovic e-mail: thrubik@kent.edu Content (in order sections were covered from the book): Chapter 6 Higher-Degree Polynomial Functions... 1 Section 6.1 Higher-Degree Polynomial Functions...

More information

Costing and Break-Even Analysis

Costing and Break-Even Analysis W J E C B U S I N E S S S T U D I E S A L E V E L R E S O U R C E S. 28 Spec. Issue 2 Sept 212 Page 1 Costing and Break-Even Analysis Specification Requirements- Classify costs: fixed, variable and semi-variable.

More information

ACC 121 PRINCIPLES OF MANAGERIAL ACCOUNTING

ACC 121 PRINCIPLES OF MANAGERIAL ACCOUNTING PRINCIPLES OF MANAGERIAL ACCOUNTING COURSE DESCRIPTION: Prerequisites: ACC 120 Corequisites: None This course includes a greater emphasis on managerial and cost accounting skills. Emphasis is on managerial

More information

Proving the Price is Right

Proving the Price is Right #3 B R E A K - E V E N A N A L Y S I S Proving the Price is Right CPA... Imagine the possibilities! Intro Learning Activity Learning Objectives 1. Understand the meaning of variable costs and fixed costs,

More information

Module 4: Cost behaviour and cost-volume-profit analysis

Module 4: Cost behaviour and cost-volume-profit analysis Page 1 of 28 Module 4: Cost behaviour and cost-volume-profit analysis Required reading Chapter 5, pages 187-213 Chapter 6, pages 230-253 Appendix 6A, pages 256-258 Overview The way in which a cost responds

More information

3.3. Solving Polynomial Equations. Introduction. Prerequisites. Learning Outcomes

3.3. Solving Polynomial Equations. Introduction. Prerequisites. Learning Outcomes Solving Polynomial Equations 3.3 Introduction Linear and quadratic equations, dealt within Sections 3.1 and 3.2, are members of a class of equations, called polynomial equations. These have the general

More information

Name Date. Break-Even Analysis

Name Date. Break-Even Analysis Name Date Break-Even Analsis In our business planning so far, have ou ever asked the questions: How much do I have to sell to reach m gross profit goal? What price should I charge to cover m costs and

More information

MANAGEMENT ACCOUNTING Cost-Volume-Profit Analysis

MANAGEMENT ACCOUNTING Cost-Volume-Profit Analysis MANAGEMENT ACCOUNTING Cost-Volume-Profit Analysis Zofia Krokosz-Krynke, Ph.D., MBA zofia.krokosz-krynke@pwr.edu.pl Wroclaw University of Technology, Building B4 Room 521 http://www.ioz.pwr.edu.pl/pracownicy/krokosz/

More information

The Profit Function: A Pedagogical Improvement For Teaching Operating Breakeven Analysis

The Profit Function: A Pedagogical Improvement For Teaching Operating Breakeven Analysis The Profit Function: A Pedagogical Improvement For Teaching Operating Breakeven Analysis Bruce D. Bagamery, Central Washington University - Lynnwood Abstract This paper presents a graphical approach for

More information

ACCOUNTING FOR NON-ACCOUNTANTS MARGINAL COSTING

ACCOUNTING FOR NON-ACCOUNTANTS MARGINAL COSTING ACCOUNTING FOR NON-ACCOUNTANTS MARGINAL COSTING MARGINAL COSTING OBJECTIVE To be able to: Explain the relevance to management decisions of: Fixed costs Variable costs Contribution Prepare an operating

More information

Mc Graw Hill Education

Mc Graw Hill Education Managerial Accounting for Managers F o u r t h Edition Eric W. Noreen, Ph.D., CMA Professor Emeritus University of Washington Peter C. Brewer, Ph.D. Wake Forest University Ray H. Garrison, D.B.A., CPA

More information

Practical Business Application of Break Even Analysis in Graduate Construction Education

Practical Business Application of Break Even Analysis in Graduate Construction Education Journal of Construction Education Spring 1999, Vol. 4, No. 1, pp. 26-37 Copyright 1999 by the Associated Schools of Construction 1522-8150/99/$3.00/Educational Practice Manuscript Practical Business Application

More information

Their point of intersection is the break-even point. The graph. Loss at right represents a break-even situation.

Their point of intersection is the break-even point. The graph. Loss at right represents a break-even situation. Chapter Financial arithmetic 17 Break-even analysis The success or failure of any business enterprise can be expressed mathematically as follows: P = R C or L = C R where: P = profit made by a business

More information

KEANSBURG SCHOOL DISTRICT KEANSBURG HIGH SCHOOL Mathematics Department. HSPA 10 Curriculum. September 2007

KEANSBURG SCHOOL DISTRICT KEANSBURG HIGH SCHOOL Mathematics Department. HSPA 10 Curriculum. September 2007 KEANSBURG HIGH SCHOOL Mathematics Department HSPA 10 Curriculum September 2007 Written by: Karen Egan Mathematics Supervisor: Ann Gagliardi 7 days Sample and Display Data (Chapter 1 pp. 4-47) Surveys and

More information

Calculating The Break-Even Point. Cost-Volume-Profit Analysis. Sales Revenue = Px Total Costs = Vx + F When Firm Breaks Even (BE):

Calculating The Break-Even Point. Cost-Volume-Profit Analysis. Sales Revenue = Px Total Costs = Vx + F When Firm Breaks Even (BE): Cost-Volume-Profit Analysis Calculating The Break-Even Point P = Selling Price Per Unit Units Produced and Sold V = Variable Cost Per Unit F = Total Fixed Costs OP = Operating Profits-Before Tax t = Tax

More information

PART TWO. management accounting

PART TWO. management accounting PART TWO management accounting CHAPTER TWELVE Management accounting, cost volume profit examined and applied Learning objectives After studying this chapter you should be able to: 1. Explain the need

More information

Answers to Text Questions and Problems. Chapter 22. Answers to Review Questions

Answers to Text Questions and Problems. Chapter 22. Answers to Review Questions Answers to Text Questions and Problems Chapter 22 Answers to Review Questions 3. In general, producers of durable goods are affected most by recessions while producers of nondurables (like food) and services

More information

College Algebra. Barnett, Raymond A., Michael R. Ziegler, and Karl E. Byleen. College Algebra, 8th edition, McGraw-Hill, 2008, ISBN: 978-0-07-286738-1

College Algebra. Barnett, Raymond A., Michael R. Ziegler, and Karl E. Byleen. College Algebra, 8th edition, McGraw-Hill, 2008, ISBN: 978-0-07-286738-1 College Algebra Course Text Barnett, Raymond A., Michael R. Ziegler, and Karl E. Byleen. College Algebra, 8th edition, McGraw-Hill, 2008, ISBN: 978-0-07-286738-1 Course Description This course provides

More information

Tennessee Mathematics Standards 2009-2010 Implementation. Grade Six Mathematics. Standard 1 Mathematical Processes

Tennessee Mathematics Standards 2009-2010 Implementation. Grade Six Mathematics. Standard 1 Mathematical Processes Tennessee Mathematics Standards 2009-2010 Implementation Grade Six Mathematics Standard 1 Mathematical Processes GLE 0606.1.1 Use mathematical language, symbols, and definitions while developing mathematical

More information

Section 12.1 Financial Ratios Section 12.2 Break-Even Analysis

Section 12.1 Financial Ratios Section 12.2 Break-Even Analysis Section 12.1 Financial Ratios Section 12.2 Break-Even Analysis OBJECTIVES Explain what a financial ratio is Describe how income statements are used for financial analysis Compare operating ratios and return-on-sales

More information

Mathematics Curriculum Guide Precalculus 2015-16. Page 1 of 12

Mathematics Curriculum Guide Precalculus 2015-16. Page 1 of 12 Mathematics Curriculum Guide Precalculus 2015-16 Page 1 of 12 Paramount Unified School District High School Math Curriculum Guides 2015 16 In 2015 16, PUSD will continue to implement the Standards by providing

More information

Analysis of Cost, Volume, and Pricing to Increase Profitability

Analysis of Cost, Volume, and Pricing to Increase Profitability Chapter 3 Analysis of Cost, Volume, and Pricing to Increase Profitability Learning Objectives After completing this chapter, you should be able to: 1Determine the sales price of a product using a cost-plus-pricing

More information

In this chapter, you will learn improvement curve concepts and their application to cost and price analysis.

In this chapter, you will learn improvement curve concepts and their application to cost and price analysis. 7.0 - Chapter Introduction In this chapter, you will learn improvement curve concepts and their application to cost and price analysis. Basic Improvement Curve Concept. You may have learned about improvement

More information

Your Guide to Profit Guard

Your Guide to Profit Guard Dear Profit Master, Congratulations for taking the next step in improving the profitability and efficiency of your company! Profit Guard will provide you with comparative statistical and graphical measurements

More information

Algebra I Credit Recovery

Algebra I Credit Recovery Algebra I Credit Recovery COURSE DESCRIPTION: The purpose of this course is to allow the student to gain mastery in working with and evaluating mathematical expressions, equations, graphs, and other topics,

More information

Task: Representing the National Debt 7 th grade

Task: Representing the National Debt 7 th grade Tennessee Department of Education Task: Representing the National Debt 7 th grade Rachel s economics class has been studying the national debt. The day her class discussed it, the national debt was $16,743,576,637,802.93.

More information

As long as global sales continue down commissions will continue going up. Whether 10 levels, 100 levels, 1000 levels deep or more.

As long as global sales continue down commissions will continue going up. Whether 10 levels, 100 levels, 1000 levels deep or more. Key Compensation Plan Features: Global Daily Pay on Unlimited Levels (no cap on income) $50, $500, $1000, $2500 and $5000 Coded Commissions 100% Check Match on $50 Coded Commissions (Once Qualified) 50%

More information

Questions. Strategies August/September Number Theory. What is meant by a number being evenly divisible by another number?

Questions. Strategies August/September Number Theory. What is meant by a number being evenly divisible by another number? Content Skills Essential August/September Number Theory Identify factors List multiples of whole numbers Classify prime and composite numbers Analyze the rules of divisibility What is meant by a number

More information

12 Marginal Costing. 12.1 Definitions

12 Marginal Costing. 12.1 Definitions 12 Marginal Costing Learning Objectives When you have finished studying this chapter, you should be able to Understand the difference between absorption costing and marginal costing Understand the concept

More information

Chapter 10 Revenue, costs and break-even analysis

Chapter 10 Revenue, costs and break-even analysis Chapter 10, costs and break-even analysis, costs and break-even analysis is the money a business makes from sales. In other words, it is the value of the sales and is also referred to as turnover. The

More information

Chapter 14. Web Extension: Financing Feedbacks and Alternative Forecasting Techniques

Chapter 14. Web Extension: Financing Feedbacks and Alternative Forecasting Techniques Chapter 14 Web Extension: Financing Feedbacks and Alternative Forecasting Techniques I n Chapter 14 we forecasted financial statements under the assumption that the firm s interest expense can be estimated

More information

Breakeven Analysis. Breakeven for Services.

Breakeven Analysis. Breakeven for Services. Dollars and Sense Introduction Your dream is to operate a profitable business and make a good living. Before you open, however, you want some indication that your business will be profitable, if not immediately

More information

Cost Volume Profit Analysis

Cost Volume Profit Analysis Cost Volume Profit Analysis 3 How The Biggest Rock Show Ever Turned a Big Profit 1 On its recent tour across North America, Europe, and Asia, the rock band U2 performed on an imposing 164-foot-high stage

More information

A synonym is a word that has the same or almost the same definition of

A synonym is a word that has the same or almost the same definition of Slope-Intercept Form Determining the Rate of Change and y-intercept Learning Goals In this lesson, you will: Graph lines using the slope and y-intercept. Calculate the y-intercept of a line when given

More information

The Multiplier Effect of Fiscal Policy

The Multiplier Effect of Fiscal Policy We analyze the multiplier effect of fiscal policy changes in government expenditure and taxation. The key result is that an increase in the government budget deficit causes a proportional increase in consumption.

More information

Course- Financial Management.

Course- Financial Management. Course- Financial Management. PHAR 4233 Semester/Year: Spring 2013 Course dates2/2/2013-2/27/2013 Lecture Objective Template Lecture #1/2 Date/time: 10:00 AM 1/3/2013 Lecture/Name Topic: Introduction to

More information

Course- Financial Management.

Course- Financial Management. Course- Financial Management. PHAR 4233 Semester/Year: Spring 2015 Lecture Objective Template Lecture #1/2 Date/time: 10:00 AM 1/6-7/2015 Lecture/Name Topic: Introduction to Financial Management and Accounting

More information

Golden Gate University (Campus) School of Accounting Course Outline Accounting 1B (Spring 2016) Introductory Managerial Accounting

Golden Gate University (Campus) School of Accounting Course Outline Accounting 1B (Spring 2016) Introductory Managerial Accounting Golden Gate University (Campus) School of Accounting Course Outline Accounting 1B (Spring 2016) Introductory Managerial Accounting 2 1 Instructor: Shiva Moozoun, Esq. Email shiva.moozoun@gmail.com Course

More information

Homework #1 Solutions

Homework #1 Solutions Homework #1 Solutions Problems Section 1.1: 8, 10, 12, 14, 16 Section 1.2: 2, 8, 10, 12, 16, 24, 26 Extra Problems #1 and #2 1.1.8. Find f (5) if f (x) = 10x x 2. Solution: Setting x = 5, f (5) = 10(5)

More information

Lesson Plan. Course Title: Digital and Interactive Media Session Title: College and Career Poster

Lesson Plan. Course Title: Digital and Interactive Media Session Title: College and Career Poster Lesson Plan Course Title: Digital and Interactive Media Session Title: College and Career Poster Lesson Duration: 3 Hours Performance Objective: Upon completion of this assignment, the student will have

More information

Web Extension: Financing Feedbacks and Alternative Forecasting Techniques

Web Extension: Financing Feedbacks and Alternative Forecasting Techniques 19878_09W_p001-009.qxd 3/10/06 9:56 AM Page 1 C H A P T E R 9 Web Extension: Financing Feedbacks and Alternative Forecasting Techniques IMAGE: GETTY IMAGES, INC., PHOTODISC COLLECTION In Chapter 9 we forecasted

More information

University of Southern California Marshall Information Services

University of Southern California Marshall Information Services University of Southern California Marshall Information Services Determine Breakeven Price Using Excel - Using Goal Seek, Data Tables, Vlookup & Charts This guide covers how to determine breakeven price

More information

Financial Planning. Presented by Emma's Garden

Financial Planning. Presented by Emma's Garden + Financial Planning Presented by Emma's Garden Financial Planning A comprehensive financial plan helps you to forecast and set your financial goals and milestones. Your financial forecasts are an essential

More information

INCOME APPROACH Gross Income Estimate - $198,000 Vacancy and Rent Loss - $9,900

INCOME APPROACH Gross Income Estimate - $198,000 Vacancy and Rent Loss - $9,900 INCOME APPROACH The Income Approach considers the return on Investment and is similar to the method that investors typically use to make their investment decisions. It is most directly applicable to income

More information

Performance Level Descriptors Grade 6 Mathematics

Performance Level Descriptors Grade 6 Mathematics Performance Level Descriptors Grade 6 Mathematics Multiplying and Dividing with Fractions 6.NS.1-2 Grade 6 Math : Sub-Claim A The student solves problems involving the Major Content for grade/course with

More information

Money Math for Teens. Break-Even Point

Money Math for Teens. Break-Even Point Money Math for Teens Break-Even Point This Money Math for Teens lesson is part of a series created by Generation Money, a multimedia financial literacy initiative of the FINRA Investor Education Foundation,

More information

Ministry of Education. The Ontario Curriculum. Mathematics. Mathematics Transfer Course, Grade 9, Applied to Academic

Ministry of Education. The Ontario Curriculum. Mathematics. Mathematics Transfer Course, Grade 9, Applied to Academic Ministry of Education The Ontario Curriculum Mathematics Mathematics Transfer Course, Grade 9, Applied to Academic 2 0 0 6 Contents Introduction....................................................... 2

More information

Welcome to Math 7 Accelerated Courses (Preparation for Algebra in 8 th grade)

Welcome to Math 7 Accelerated Courses (Preparation for Algebra in 8 th grade) Welcome to Math 7 Accelerated Courses (Preparation for Algebra in 8 th grade) Teacher: School Phone: Email: Kim Schnakenberg 402-443- 3101 kschnakenberg@esu2.org Course Descriptions: Both Concept and Application

More information

Big Ideas in Mathematics

Big Ideas in Mathematics Big Ideas in Mathematics which are important to all mathematics learning. (Adapted from the NCTM Curriculum Focal Points, 2006) The Mathematics Big Ideas are organized using the PA Mathematics Standards

More information

NIKE Case Study Solutions

NIKE Case Study Solutions NIKE Case Study Solutions Professor Corwin This case study includes several problems related to the valuation of Nike. We will work through these problems throughout the course to demonstrate some of the

More information

Course Outlines. 1. Name of the Course: Algebra I (Standard, College Prep, Honors) Course Description: ALGEBRA I STANDARD (1 Credit)

Course Outlines. 1. Name of the Course: Algebra I (Standard, College Prep, Honors) Course Description: ALGEBRA I STANDARD (1 Credit) Course Outlines 1. Name of the Course: Algebra I (Standard, College Prep, Honors) Course Description: ALGEBRA I STANDARD (1 Credit) This course will cover Algebra I concepts such as algebra as a language,

More information

CSUN GATEWAY. Managerial Accounting Study Guide

CSUN GATEWAY. Managerial Accounting Study Guide CSUN GATEWAY Managerial Accounting Study Guide Table of Contents 1. Introduction to Managerial Accounting 2. Introduction to Cost Terms and Cost Concepts 3. Allocation of Manufacturing Overhead Costs 4.

More information

www.optionseducation.org OIC Options on ETFs

www.optionseducation.org OIC Options on ETFs www.optionseducation.org Options on ETFs 1 The Options Industry Council For the sake of simplicity, the examples that follow do not take into consideration commissions and other transaction fees, tax considerations,

More information

Mathematics Online Instructional Materials Correlation to the 2009 Algebra I Standards of Learning and Curriculum Framework

Mathematics Online Instructional Materials Correlation to the 2009 Algebra I Standards of Learning and Curriculum Framework Provider York County School Division Course Syllabus URL http://yorkcountyschools.org/virtuallearning/coursecatalog.aspx Course Title Algebra I AB Last Updated 2010 - A.1 The student will represent verbal

More information

Algebra 1 Practice Keystone Exam

Algebra 1 Practice Keystone Exam Algebra 1 Practice Keystone Exam 1. Which of the following inequalities is true for ALL real values of x? a. x 3! x 2 b. 3x 2! 2x 3 c. (2x) 2! 3x 2 d. 3(x! 2) 2 " 3x 2! 2 2. An expression is shown to the

More information

Creating a Successful Financial Plan

Creating a Successful Financial Plan Creating a Successful Financial Plan Basic Financial Reports Balance Sheet - Estimates the firm s worth on a given date; built on the accounting equation: Assets = Liabilities + Owner s Equity Income Statement

More information

South Carolina College- and Career-Ready (SCCCR) Algebra 1

South Carolina College- and Career-Ready (SCCCR) Algebra 1 South Carolina College- and Career-Ready (SCCCR) Algebra 1 South Carolina College- and Career-Ready Mathematical Process Standards The South Carolina College- and Career-Ready (SCCCR) Mathematical Process

More information

MoneyAndStuff.info Budgeting Lesson Plan

MoneyAndStuff.info Budgeting Lesson Plan AndStuff.info Budgeting Lesson Plan Grade Level: 3 5 Time Duration: 1 hour/class period Overview & Purpose: This activity is designed to help students develop the attitudes and skills needed to achieve

More information

The final grade will be determined as follows:

The final grade will be determined as follows: Desales University CR501 Financial and Managerial Accounting COURSE DESCRIPTION: Development of an advanced level understanding of the preparation, analysis, and utilization of financial statements and

More information

PARCC Grade 08 Mathematics Practice Test Released April, 2014 http://practice.parcc.testnav.com/#

PARCC Grade 08 Mathematics Practice Test Released April, 2014 http://practice.parcc.testnav.com/# Non-Calculator Part 1. Solve for. Enter your answer in the space provided. Enter only your solution. ( ) ( ) 2. Which decimal is equivalent to? Select your answer. A. B. C. D. 3. Two lines are graphed

More information

Introduction to Macroeconomics TOPIC 2: The Goods Market

Introduction to Macroeconomics TOPIC 2: The Goods Market TOPIC 2: The Goods Market Annaïg Morin CBS - Department of Economics August 2013 Goods market Road map: 1. Demand for goods 1.1. Components 1.1.1. Consumption 1.1.2. Investment 1.1.3. Government spending

More information

Understanding Financial Statements. For Your Business

Understanding Financial Statements. For Your Business Understanding Financial Statements For Your Business Disclaimer The information provided is for informational purposes only, does not constitute legal advice or create an attorney-client relationship,

More information

High School Functions Interpreting Functions Understand the concept of a function and use function notation.

High School Functions Interpreting Functions Understand the concept of a function and use function notation. Performance Assessment Task Printing Tickets Grade 9 The task challenges a student to demonstrate understanding of the concepts representing and analyzing mathematical situations and structures using algebra.

More information