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chapter%20400 - Chapter 4 Cost-Volume-Profit Analysis A...

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September 7, 2011 Accounting 2102 1 Chapter 4 Cost-Volume-Profit Analysis: A Managerial Planning Tool
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the income statement . . . How is a “normal” income statement arranged? The “normal” income statement doesn’t really equip managers with the operating knowledge they need to make informed decisions. What do you think a manager would need to make informed decisions? September 7, 2011 Accounting 2102 2
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Contribution Margin Income Statement Contribution Margin Income Statement September 7, 2011 Accounting 2102 3 Sales Revenue (SR) Operating Income (op y) What does the Contribution Margin Contribution Margin tell us? 1. 2. Why would this information be important to a manager?
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Calculating Break Even and Target Profit in Sales Revenue – Expenses = Operating Income September 7, 2011 Accounting 2102 4
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Calculating Break Even and Target Profit in September 7, 2011 Accounting 2102 5 Where does our sales revenue go? Variable Cost Ratio Contribution Margin Ratio
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Quench Your Thirst, LLC September 7, 2011 Accounting 2102 6 You have decided to open a lemonade stand. After intensive market research, you
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