Cost-volume-profit (CVP) analysis is used to determine how changes in costs and volume affect a company's operating income and

net income. In performing this analysis, there are several assumptions made, including:
0 Sales price per unit is constant. 0 Variable costs per unit are constant. 0 Total fixed costs are constant. 0 Everything produced is sold. 0 Costs are only affected because activity changes. 0 If a company sells more than one product, they

are sold in the same mix.

Key Calculations for CVP Analysis

Contribution margin and contribution margin ratio

Break-even point

Targeted income

Product List

Tea dust Sugar Milk Oil Water bottle Cake Banana Sweet Biscuit Glass Stove Box Chair & Bench Water purifying machine Tea pot Electricity Light Rent

Variable Cost
Product: Tea dust Sugar Milk Oil Water bottle Cake Banana Sweets Biscuit Total Purchasing cost 3,400/2,700/7,200/3,000/2,400/6,000/9,000/1,650/2,100/37,450/-

Fixed Cost
Product: Glass Stove Burner Box Chair & Bench Water Purifier Machine Electricity Bill Expense Tea Pot Electric Bulb Rent Expense Total Cost 180/1,800/600/1,150/7,400/200/600/200/2,000/14,130/-

Unit of Production
Item Tea Cake Banana Sweets Per day 200cup 52 pieces 100 pieces 35 pieces Month 6,000 cups 1,560 pieces 3,000 pieces 1,050 pieces 60 bottle 1500 pieces Unit Price 5.0/cup 5.00/piece 5.00/piece 3.00/sweet 55.00/jar 3.00/unit Selling Price 30,000 7,800 15,000 3,150 3,300 4,500 63,750

Water bottle 2 bottle Biscuit Total 50 pieces

Analysis
Total Selling Unit 13170 Selling price per unit (63,750/13,170) = 4.8405/- per unit Variable cost per unit (37450/13170) = 2.8435/- per unit Fixed Cost 14130 Taka Contribution Margin (4.8405-2.8435) = 1.9969/- per unit

CVP Analysis
Net Operating Income C/M Ratio BEP Unit Sales BEP Sales Volume Degree of operating leverage 12170 39.9938% 7076 unit Tk. 32,250.6704 2.16105 times