0715--01 (1) - Unit sales volume P X REVENUE X COST X...

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Cost-volume-profit analyses Linear cost function COST( ) X . VC X FC Revenue function REVENUE ( ) X . Sales_priceX . SP X Profit function PROFIT( ) X REVENUE ( ) X COST( ) X PROFIT( ) X . SP X ( ) . VC X FC P( ) X . ( ) SP VC X FC Definitions CM Unit SP VC (Contribution margin per unit .) CMR Total_CM Revenues (Contribution margin ratio.) CMR . ( ) SP VC X . ( ) SP X R TVC R P . . ( ) SP VC X . ( ) SP X R FC . CMR R FC
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Spartan Bike example SP 170.00 Expected average sales price per unit. VC m 88.00 Expected variable mfg costs per unit. VC nm 5.50 Expected variable nonmfg. costs/unit. FC m 400000 Expected fixed manufacturing costs. FC nm 173750 Expected fixed nonmanufacturing costs. X .. , 0 100 15000 Expected unit sales volume. REVENUE ( ) X . SP X COST( ) X . VC m VC nm X FC m FC nm P( ) X . SP X . VC m VC nm X FC m FC nm P( ) X . SP VC m VC nm X FC m FC nm P( ) X . ( ) 170 88 5.5 X 400000 173750 P( ) X . 76.5 X 573750 = REVENUE ( ) 15000 2550000 = COST( ) 15000 1976250 = P( ) 15000 573750
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Spartan Bike example
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Unformatted text preview: Unit sales volume P( ) X REVENUE( ) X COST( ) X 573750 X Breakeven analysis example P( ) X . 76.5 X 573750 ( ) P . 76.5 X 573750 . 76.5 X 573750 X 7500 Target profit analysis example ROI PROFIT INVESTMENT 134000 1000000 0.134 Target profit = 134,000 P( ) X . 76.5 X 573750 ( ) P 134000 . 76.5 X 573750 134000 . 76.5 X 573750 X 9251.63398. .. X target 9252 After-tax profit functions P bt ( ) X REVENUE ( ) X COST( ) X P at REVENUE COST INCTAX P at R C ( ) . ( ) R C Tax_rate P at . ( ) R C 1 ( ) . ( ) R C TR P at . ( ) R C ( ) 1 TR P at ( ) X . ( ) . CM X FC ( ) 1 TR P at ( ) R . ( ) . CMR R FC ( ) 1 TR ν...
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0715--01 (1) - Unit sales volume P X REVENUE X COST X...

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