CVP

:
CVP analysis requires that all the company's costs, including manufacturing, selling, and administrative costs, be identified as variable or fixed.

BEP;
Exin Chemical’s LAMBDA Break-Even Income Statement Revenues (250,000 units × $3) $750,000

Variable Costs (250,000 units × $1.80) $450,000, Contribution Margin Fixed Costs Net Income 300,000 $300,000 $0

This income statement format is known as the contribution margin income statement and is used for internal reporting only.

Break-even point in units. . Another way to calculate break-even sales dollars is to use the mathematical equation. ” .Break-even point in dollars.

Targeted income .

000 .000 Variable Costs (333.333 * units × $1.000 40.000 Contribution Margin Fixed Costs Income before Taxes Income Taxes (40%) Net Income 400.Assuming the company has a 40% income tax rate A summarized contribution margin income statement can be used to prove these calculations.333 * units × $3) $1.80) 600. Exin Chemical’s Income Statement 2010 Targeted Net Income Sales (333.000 100.000 300.000.000 $ 60.

333 * units × $1.80) 600.Exin Chemical’s Income Statement 2010 Targeted Net Income Sales (333.000 300.000 $ 60.000 Contribution Margin Fixed Costs Income before Taxes Income Taxes (40%) Net Income 400.333 * units × $3) $1.000 40.000 100.000.000 Variable Costs (333.000 .

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