Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
0Activity
0 of .
Results for:
No results containing your search query
P. 1
CVP Analysis.doc

CVP Analysis.doc

Ratings: (0)|Views: 1|Likes:
Published by Zimbo Kigo
costing
costing

More info:

Published by: Zimbo Kigo on Oct 25, 2013
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as DOC, PDF, TXT or read online from Scribd
See more
See less

10/25/2013

pdf

text

original

 
CVP ANALYSISCONTRIBUTION MARGIN RATIO
 The contribution margin (CM) ratio is the ratio of contribution marginto total sales:
Contribution marginCM ratio= Total sales
If the company has only one product, the CM ratio can also becomputed using per unit data:
Unit contribution marginCM ratio=Unit selling price
 The CM ratio shows how the contribution margin will be affected by agiven change in total sales.
BREAKEVEN ANALYSIS - EQUATION METHOD
Q =Break-even quantitySales =Variable expenses + Fixed expenses + ProfitsQ x selling price/unit = (Q x variable expense/unit) + Fixed expenses +Profits
BREAKEVEN ANALYSIS - CONTRIBUTION MARGIN METHOD
Break-even quantity = Fixed ExpensesCM/u To calculate the breakeven point in sales dollars, substitute ratios as apercent of sales for dollars. Or, calculate the breakeven point in unitsand multiply by the selling price/unit.
MARGIN OF SAFETY 
 The margin of safety is the excess of budgeted (or actual) salesover the break-even sales. The margin of safety can be expressedeither in dollar or percentage form. The formulas are:
Margin of safety=Total sales-Breakeven salesin dollars

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->