EXCERCISES ON BES. Compute the Break-even sales in pesos and units 1.A product line is sold at a unit selling price of P9.00. Variable cost is estimated.

Slides:



Advertisements
Similar presentations
Cost-Volume-Profit Analysis
Advertisements

6 Slide 1 Cost Volume Profit Analysis Chapter 6 INTRODUCTION The Profit Function Breakeven Analysis Differential Cost Analysis.
Contemporary Engineering Economics, 4 th edition, © 2007 Estimating Profit from Production Lecture No. 31 Chapter 8 Contemporary Engineering Economics.
GOALS BUSINESS MATH© Thomson/South-WesternLesson 11.2Slide Break-Even Point Calculate the break-even point for a product in units Calculate the break-even.
Copyright © 2000 by M. Ray Gregg. All rights reserved. 1.
Variable Costing Chapter 21 Exercises.
4 Important Formulas Breakeven Point: Sales Volume Breakeven Point: Selling Price Current Ratio Quick Ratio.
MARGINAL COST OR VARIABLE COST OR DIRECT COST
Analyzing Cost, Volume, and Pricing to Increase Profitability Chapter 3.
The Basics of Cost-Volume-Profit (CVP) Analysis Contribution margin (CM) is the difference between sales revenue and variable expenses. Next Page Click.
Finance June 2012.
Cost-Volume-Profit Relationships Chapter 6 © The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill The Basics of Cost-Volume-Profit (CVP) Analysis.
© Business Studies Online “A firm Breaks Even if it doesn’t make a profit or a loss” In other words profit = 0 For this to happen the money coming into.
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 7 Cost-Volume- Profit Analysis.
Break-Even Chart A Business supplies the following figures about its activities: Fixed Costs: = €300,000 Variable Cost: = €20 per unit Forecast output.
Cost-Volume-Profit Analysis and Variable Costing
5.3 Break-Even Analysis Chapter 32.
Chapter 5. Assumptions of CVP Analysis  Selling price is constant.  Costs are linear.  In multi-product companies, the sales mix is constant.  In.
The importance of Gross margin Example 1: Sales price ok, sales volume ok compared to the size of the company: Sales income100 units x
1. Describe and illustrate income reporting under variable costing and absorption costing. 2. Describe and illustrate income analysis under variable costing.
Do most companies like Netflix try to understand how the costs of the company behave? 1.Yes 2.No.
Chapter 3 Cost, Revenue, and Income Behavior
Cost-Volume-Profit Analysis: A Managerial Planning Tool
The Mystery of Calculating The Breakeven Point. What in the world is it? w It is the point at which a company does not make any money. w It is the calculation.
Chapter 21 Variable Costing
ACTG 3020 Chapter 6 - Cost-Volume-Profit Relationships.
Chapter Six Cost-Volume-Profit Relationships. CVP ANALYSIS Cost Volume Profit analysis is one of the most powerful tools that helps management to make.
PRICING – DETERMINING THE PRICE Wednesday, December 8.
Chapter 18. Identify how changes in volume affect costs.
Chapter 2. Cost-volume-profit analysis examines the behavior of total revenues total costs operating income as changes occur in the output level selling.
Cost-Volume-Profit Analysis. CVP Scenario Cost-volume-profit (CVP) analysis is the study of the effects of output volume on revenue (sales), expenses.
BREAK-EVEN The break-even point of a new product is the level of production and sales at which costs and revenues are exactly equal. It is the point at.
Topic Four by Dr. Ong Tze San Cost-Volume-Profit Relationships.
1 POINT 2 POINTS 3 POINTS 4 POINTS 5 POINTS Choc. Creme 1 POINT 4 POINTS 3 POINTS 2 POINTS2 POINTS 3 POINTS 2 POINTS 5 POINTS 2 POINTS 3 POINTS 4.
@ 2012, Cengage Learning Cost Behavior and Cost-Volume-Profit Analysis LO 3b – Analyzing the Effects of Changes on the Cost-Volume-Profit Relationship.
Lecture 3 Cost-Volume-Profit Analysis. Contribution Margin The Basic Profit Equation Break-even Analysis Solving for targeted profits.
© The McGraw-Hill Companies, Inc., 2002 McGraw-Hill/Irwin Cost-Volume-Profit Analysis Lecture 16.
© Ahmad Zahiruddin Yahya 2011 Quick Check Baker Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the.
BREAK EVEN ANALYSIS  We use the breakeven analysis to look at the point where we start to make a profit in the business.  Any business wants to make.
Multiple Product CVP Analysis The easy way. What is multiple product CVP Analysis? Sell multiple products Ratio of products sold is assumed constant Determine.
BREAKEVEN ANALYSIS An important tool for management decision making.
Chapter 5, Section 3 Cost, Revenue, and Profit Maximization.
@ 2012, Cengage Learning Cost Behavior and Cost-Volume-Profit Analysis LO 3a – Understanding Break-Even.
Contribution Margins. Cost-volume-profit Analysis: Calculating Contribution Margin Financial statements are used by managers to help make good business.
Cost & Management Accounting Break-even Analysis Lecture-31 Mian Ahmad Farhan (ACA)
Break-Even Very important concept for the exam For some of you it will be building on prior knowledge.
Marginal Costing & Break Even Analysis. Marginal cost The amount at any given volume of output by which the aggregate costs are changed if the volume.
BREAK-EVEN (BE) Unit 2 Business Development Finance GCSE Business Studies.
Revenues, Costs & Profit
Lesson 15-2 Determining Breakeven
Break-even Analysis Lecture-30 Main Ahmad Farhan.
Marginal Costing By Maura Fehily. Marginal Costing By Maura Fehily.
University of 6th of October, Egypt
AMIS 310 Foundations of Accounting
Breakeven and Breakeven Charts
COURSE LECTURER: DR. O. J. AKINYOMI
Starter What’s the story? Title: Break-Even.
Costs, Revenue and Profit
AMIS 310 Foundations of Accounting
AMIS 310 Foundations of Accounting
Money received by the business
Contribution per unit= Selling price – Direct Cost per unit
Lesson 15-2 Determining Breakeven
Cost & Management Accounting
A what level of production does the business start to make a profit?
Break-Even Chart A Business supplies the following figures about its activities: Fixed Costs: = €300,000 Variable Cost: = €20 per unit Forecast output.
Cost & Management Accounting
Lesson 15-2 Determining Breakeven
Cost Volume Profit Analysis
Cost & Management Accounting
Presentation transcript:

EXCERCISES ON BES

Compute the Break-even sales in pesos and units 1.A product line is sold at a unit selling price of P9.00. Variable cost is estimated to be 60% of sales. Total fixed cost is P360,000 2.The annual fixed cost is P100,000. each unit sold contributes P6.00 to the recovery of fixed cost and to profit. Unit variable cost is P6.00

3.The total annual fixed cost amounted to P150,000. Each unit contributes 25% when it is sold at a unit selling price of P Total sales is P1,000,000 when the unit selling price is P5.00. Total annual fixed cost is P400,000 and total amount of variable cost, P600,000 5.Total amount of fixed cost and variable cost are P60,000 and P140,000 respectively. Unit selling price is P20.00

6.Variable cost ratio is 60%. Annual fixed cost amounted to P240,000. Unit selling price P20,000 7.Contribution margin rate is 30% of the unit selling price of P Total annual fixed cost is P120,000