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
(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

behavioral aspect of standard costing

allocate the overheads to the three departments and do the secondary allocation of service departments

In most situations this will be essential to grant credit to customers. It may be essential either due to competition or because of the custom of trade. Though, when we grant credi

Direct Material Cost Variances (DMCV) This variance is a general difference in the standard direct material cost and the actual direct material cost. This variance may be prese

A company produces three types of items. A single machine is used to produce the three items on a cyclical basis. The company has the policy that every item is produced once during

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

Q. Can FCA Help Compare Opening A New Landfill Versus Building A Wasteto-Energy Incinerator? Ans. Yes. The principles of FCA are precisely the same no matter how you relat

Listed below are some balances of XYZ, Inc as of and for the year ended December 31, 2012 and 2013 Year ending 12/31/13   Reven

Methods Required To Allocate Joint Costs 1) Physical/Unit Measure 2) Constant gross margin rate 3) Net realizable value.