Example of profit volume graph, Cost Accounting

Assignment Help:

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

 


Related Discussions:- Example of profit volume graph

Accounting for materials, list and explain all the procedures of material c...

list and explain all the procedures of material control

Compute the days'' sale, Year Ending April 2009, 2009 April 30, 2008 Net Sa...

Year Ending April 2009, 2009 April 30, 2008 Net Sales $10,148,082 $10,070,778 Accs Receivable 1,171,797 1,161,481 Assume that the accounts receivable (in thousands) were $996,852 a

Objective type question, 1. Pardee Company plans to sell 12,000 units durin...

1. Pardee Company plans to sell 12,000 units during the month of August. If the company has 2,500 units on hand at the start of the month, and plans to have 2,000 units on hand at

Calculate the ß, Calculate the β of Maine Corporation from the following da...

Calculate the β of Maine Corporation from the following data. The prices are at the beginning and at the end of each year     Normal 0 false false

Cost accounting as a service activity, critically explain cost accounting a...

critically explain cost accounting as 1. a service activity 2. a descriptive/analytical discipline 3. an information system

Algebra in cost accounting, I''m about to take my first cost accounting cl...

I''m about to take my first cost accounting class in college, Do i need algebra skills to do well on this class

Compute the industry volume variance for each product, The next year's budg...

The next year's budget for Benny, Inc., is given below: Product 1-2 Sales $945,000-688500 Variable costs 459,900-297,000 Fixed costs 300,000-3

Tracking direct materials, Tracking Direct Materials Jack keeps full re...

Tracking Direct Materials Jack keeps full records of the material released to each job. When Donnie gathered up light bulbs, tape, breakers, wire, and wire nuts on the morning

Batch costing, Batch Costing This is a kind of job costing that is uti...

Batch Costing This is a kind of job costing that is utilized when production consists of limited repetitive work and definite number of item manufactured in one batch.  A batc

Cost audit, what is cost audit? types of cost audit explain

what is cost audit? types of cost audit explain

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd