Chapter091 - Break-Even Analysis - Contribution Margin...

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Unformatted text preview: Break-Even Analysis - Contribution Margin & Income Statement Monthly Yearly Target Profit before Tax $48,000 Unit BE = 125 1,500 Quantity BE $ = $9,375 $112,500 Revenue $75.00 $0 $0 Units $48,000 = 225 2,700 Units $48,000 = 225 2,700 Costs Margin of safety = 0.5 p. 339 Variable $35.00 $0 $0 Operating leverage = p. 339 Contribution margin $40.00 $0 $0 Contribution margin % 53% #DIV/0! #DIV/0! Fixed $5,000 $60,000 Total Costs $5,000 $60,000 Profit before Tax-$5,000-$60,000 Tax 20% $0 $0 Net Profit (Profit after Tax)-$5,000-$60,000 Total Per Month Total Per Year (F+N) CM per Unit (F+N) CM% (F+N) CM per Unit (F+N) CM% Planned sales - Breakeven sales Planned sales CM N Check out: Tools/Solver - not necessary for this simple example, but Solver is definitely beneficial for ABC CVP analysis. The Solver model is included with this worksheet. A B C D E F G H I J K L M N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Break-Even Analysis - p336 Unit Quantity 0 Revenue $75.00 $0 Costs Unit Variable 35.00 Batch variable $100 30 #DIV/0! Contribution margin #DIV/0! $0 Fixed $50,000 Total Costs $50,000 Profit before Tax-$50,000 Tax 20% $0 Net Profit (Profit after Tax)-$50,000 Total Per Year Check out: Tools/Solver The Solver model is included with this worksheet. Calm Windy Gale Total Unit Total Unit Total Unit Total Quantity Selling price $30.00 $32.00 $40.00 Ratio 50% 40% 10% Revenue $0 $0 $0 $0 Costs Variable 24.00 24.00 36.00 Contribution margin $6.00 $0 $8.00 $0 $4.00 $0 $0 Contribution margin % 20% 0% 25% 0% 10% 0% 0% Fixed $168,000 Total Costs $168,000 Profit before Tax-168,000 Tax 20% Profit after Tax-$168,000 CM% 21% BE $ = $800,000 $ # Calm $400,000 13,333 Windy $320,000 10,000 Gale $80,000 2,000 $800,000 Check out: Tools/Solver - not necessary for this simple example, but Solver is definitely beneficial for ABC CVP analysis. The Solver model is included with this worksheet. A B C D E F G H I J K L 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Sports Plus, Inc., produces software for personal computers. The companys main product is Swing!, a golf training program. The total v Suppose that 25 percent of the manufacturing fixed costs are batch-level costs from testing and packaging. Because of the nature of the Optimal solution with Excel Solver Volume Based ABC Fixed costs Batch size $76,340 12 $916,080 Batches $132,620 Batch level costs $65,100 Non batch costs Total fixed costs $1,113,800 Cost per batch Cost per unit Selling price $363.00 Variable costs $13.00 Contribution margin $350.00 Units Breakeven point - traditional costing 3,182 Batches Selling price Variable costs Contribution margin Fixed costs Profit before tax Tax Profit after tax Breakeven units Breakeven dollars A) 2,727 B) 2,752 C) 2,856 D) 2,650 E) 3,182...
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Chapter091 - Break-Even Analysis - Contribution Margin...

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