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

 

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

Ask an Expert

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

Write your message here..

Related Questions

Gains and losses on disposal, When assets are replaced during the anticipat... When assets are replaced during the anticipated life of the project, or at the end of the anticipated life of the project, they are sold at their pre-determined scrap values. Incom

Find out overhead application rate, Find Out Overhead Application Rate ... Find Out Overhead Application Rate The given is the budget of Superb Engineering Works for the 2002 year Factory overheads Kshs 62,000

Application of a hand-held clinical thermometer, In an application of a han... In an application of a hand-held clinical thermometer for the National Health Service it is required to use disposable temperature sensors and digital read out of temperature betwe

Answer, Chen Enterprises purchased 67,000 pounds (cost = $616,400) of direc... Chen Enterprises purchased 67,000 pounds (cost = $616,400) of direct material to be used in the manufacture of the company''s only product.

What is the steady-state value of capital labor ratio, 1. A country has the... 1. A country has the per-worker production function  y t = 6 k t 0.5   where y t is output per worker and k t is the capital-labor ratio. The depreciation rate is 0.1 and t

ECONOMIC ORDER QUANTITY, ANNUAL DEMAND = 2400 UNITS ORDERING COST PER UNIT ... ANNUAL DEMAND = 2400 UNITS ORDERING COST PER UNIT = RS.4.00/- UNIT PRICE = RS 2.40/- STORAGE COST = 2% P.A INTEREST RATE = 10 % P.A LEAD TIME = HALF MONTH CALCULATE ECONOMIC ORDER

EOQ , formula for economic order quantity formula for economic order quantity

Define the marginal, Total profit means the total revenue excluding the tot... Total profit means the total revenue excluding the total cost of the certain products. Average profit defines the profit which comes and achieved after selling each unit. Total

Calculate discounted cash flow, The Integrated Management Project is to be ... The Integrated Management Project is to be based on an organisation, a strategic business unit, or profit centre that has good potential for growth and development. The brief is to

Calculate the incremental liquidation cash flows, How relevant to the decis... How relevant to the decision are the $800(000) initial cost of the project and the operating losses of $300(000)? Calculate the incremental liquidation cash flows for the abando