costvolumeprofitanalysisACC200 2009

costvolumeprofitanalysisACC200 2009 - Objectives Cost...

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Objectives -- Cost Volume Profit Analysis and Variable Costing u Construct a contribution margin income statement and compare it to a traditional income statement u Describe the relationship between activity level and contribution margin, fixed costs, and net income u Describe and compute contribution margin per unit, contribution margin ratio, and operating leverage u Use contribution margin and operating leverage in "what-if" analysis u Calculate the breakeven point in both units and dollars u Compute the breakeven point in a multiple product environment u Compute the number of units and sales dollars to reach a target profit (both before and after-tax) u Describe the assumptions of cost-volume-profit analysis
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Management Decision Cycle FINANCING DECISIONS INVESTING DECISIONS OPERATING DECISIONS FUNDING OPERATING PROFIT INVESTMENTS
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Income Statements of Product Companies Income Statement Dell (2/1/08) Apple (9/27/08) $ % $ % Sales Revenues 61,133 100.0% 32,479 100.0% Cost of Goods Sold 49,462 80.9% 21,334 65.7% Gross Profit/Margin 11,671 19.1% 11,145 34.3% Selling/General/Administrative Expenses (7,538) 12.3% (3,761) 11.6% (693) 1.1% (1,109) 3.4% Other Income/Expenses 387 0.6% 620 1.9% Income Tax (880) 1.4% (2,061) 6.3% Net Income 2,947 4.8% 4,834 14.9%
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This note was uploaded on 04/21/2009 for the course ACC 200 taught by Professor Buckless during the Spring '08 term at N.C. State.

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costvolumeprofitanalysisACC200 2009 - Objectives Cost...

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