Example of profit volume graph, Cost Accounting

Example of Profit Volume Graph

The summary results of a company are given as:

Product                       

A

B         

C

Total

 

Shs.000

Shs.000

Shs.000

Shs.000

Sales revenue  

300

200

100

600

Variable costs

150

120

  70

340

Contribution

 

 

 

260

Fixed costs     

 

 

 

100

Net profit

 

 

 

160

Contribution sales ratio

0.5

0.4

0.3

0.433

Required

1. Prepare a profit volume graph that shows the overall consequences.

2. Prepare an amended profit curve whereas the market forces have led to a switch of Shs. 200,000 of sales from product A to product C

3. Prepare a summary that shows the value of each of the following for both the amended results and the original results

a) Net profit

b) Break-even point

c) Margin of safety

d) Overall contribution sales ratio

Solution

 

2162_Example of Profit Volume Graph.png

The shown profit volume graph displays the existing and amended cost curves.The amended data that implements the switch of Shs. 200,000 of sales to product C from product A may be summarized as:

Product

A

B

C

Total

 

Shs.000

Shs.000

Shs.000

Shs.000

Sales revenue  

100     

200

300

600

Variable costs

  50

120

210

380

Contribution

  50

  80

  90

220

Fixed costs

 

 

 

100

Net profit       

 

 

 

120

Contribution sales ration

    0.50

    0.40

    0.30

     0.367

 

Posted Date: 2/7/2013 1:12:59 AM | Location : United States







Related Discussions:- Example of profit volume graph, Assignment Help, Ask Question on Example of profit volume graph, Get Answer, Expert's Help, Example of profit volume graph Discussions

Write discussion on Example of profit volume graph
Your posts are moderated
Related Questions
#purchase price R45 order costs R175 lead time 6 days cost of capital (after taxation) 20% direct inventory holding costs R25 annual demand 8500 units business operational 330day p

Behavioral Classification of Costs Definition Cost behavior refers to the change in costs as increase or may decrease like the output level changes that are like we risin

(i) In terms of cashflow, which month will be the most costly for your project? (ii) If the 3rd and 4th months are more expensive by 25% each because the outsourced labour took

Example of Flexible and Fixed Budget A company has budgeted to produce and sell 100,000 units of cakes throughout the next period. The selling price per cake is Sh. 20 and var

Price and Cost   information  play  no  role  in  negotiated  transfer  prices.  Do  you  agree? Describe.

Controllable and Non Controllable Costs Controllable costs can be influenced on the level of authority at that they are being analyzed when non-controllable costs cannot.

The Zooline Company (Pty) Ltd is an American based company that focuses on the LSM 8 -10 markets. They do vehicle interiors, raise or lower suspensions and install top end sound sy

Adele Weiss manages the campus flower shop. Flowers must be ordered three days in advance from her supplier in Mexico. Advance sales are so small that Weiss has no way to estimate

Objectives of Budgetary Planning 1) Coordination The budgetary process needs that visible detailed budgets are developed to cover every activity, function or department

Questions 8-10 rely on the following data. FrontGrade Systems allocates manufacturing over- head based on machine hours. Each connector should require 11 machine hours. According t