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

Internal sources of funds, While we are looking for sources funds it is oth...

While we are looking for sources funds it is other than natural to start searching from home. What do we have? During examining the requirement for working capital we could also ma

Cost classification bases, Cost Classification Bases Costs can be clas...

Cost Classification Bases Costs can be classified on either more or one of the given bases as: a) Are the costs dependent on the level of output as like variable or are the

Calculate total revenue-marginal revenue-marginal cost, In the beach city o...

In the beach city of Santa Barbara, California, there are seven bathing suit stores, each with the same schedule of costs and each facing an identical demand curve. Swim N Style is

Definition of budget, DEFINITION OF BUDGET As per the Institute of Cos...

DEFINITION OF BUDGET As per the Institute of Cost & Management (ICMA), London, a BUDGET is 'a quantitative statement and / or financial, prepared and approved prior to a defin

Allocation of service department costs, Allocation of Service Department Co...

Allocation of Service Department Costs Allocation of Service Department Costs to Production departments ,Service departments are those departments that provide support to prod

Income received in advance, This is the income received but not earned thro...

This is the income received but not earned throughout the accounting period. Conversely, this is the income for those services are to be rendered in future. Such income is deducted

Calculate the optimal re-order quantity, Mr. Marley is a wholesaler who buy...

Mr. Marley is a wholesaler who buys and sells a wide range of products, one of which is the Laker. Mr. Marley sells 24,000 units of the Laker each year at a unit price $20. Sales o

Allocation of overhead costs, Allocation of Overhead Costs Allocation ...

Allocation of Overhead Costs Allocation of overheads is the term utilized where the overhead cost item can be charged to a exact cost center without the requirement for any es

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