Scribd
Upload
87 views

CVP Analysis

1. The document contains a contribution format income statement and break-even analysis for 4 different scenarios with varying sales volumes and costs. It shows calculations for sales, variable costs, contribution margin, fixed costs, and net income. 2. A multi-product break-even analysis calculates the break-even point for a company with two product lines based on their sales mix and contribution margins. 3. Operating leverage is calculated showing how a 25% increase in sales results in a 150% increase in net income due to fixed costs.

Uploaded by

Harold Beltran Dramayo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
87 views

CVP Analysis

1. The document contains a contribution format income statement and break-even analysis for 4 different scenarios with varying sales volumes and costs. It shows calculations for sales, variable costs, contribution margin, fixed costs, and net income. 2. A multi-product break-even analysis calculates the break-even point for a company with two product lines based on their sales mix and contribution margins. 3. Operating leverage is calculated showing how a 25% increase in sales results in a 150% increase in net income due to fixed costs.

Uploaded by

Harold Beltran Dramayo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 10

Given Per unit Percentage Required 1: Required 2: Per unit

Sales (30000 units) 150,000 5 172,500 162,000 4.5


Less: Variable Costs 90,000 3 0.60 103,500 108,000 3.0
Contribution margin 60,000 2 0.40 69,000 54,000 1.5
Less: Fixed Costs 50,000 50,000 50,000
Net Income 10,000 19,000 4,000
Percentage Required 3: Per unit Percentage Required 4: Per unit Percentage
156,750 5.5 151,200 5.6
0.67 85,500 3.0 0.55 86,400 3.2 0.57
0.33 71,250 2.5 0.45 64,800 2.4 0.43
60,000 50,000
11,250 14,800
Breakeven Analysis
Required 1 Required 2
Per unit Percentage Per unit
Sales 12,000.00 30.00 10,500.00 42.00
Less: Variable Costs 4,000.00 10.00 2,500.00 10.00
Contribution margin 8,000.00 20.00 8,000.00 32.00
Less: Fixed Costs 8,000.00 8,000.00
Net Income 0.00 0.00

Fixed cost 8,000.00


BEP (persons) = 400.00
CM/unit 20.00
Breakeven and Target Profit Analysis
Required 1 Required 2
Per unit Percentage Per unit Percentage
Sales 4,500,000.00 900.00 990.00
Less: Variable Costs 3,150,000.00 630.00 0.70 693.00
Contribution margin 1,350,000.00 270.00 0.30 297.00 0.30
Less: Fixed Costs 1,350,000.00
Net Income 0.00 NO. No changes in CM percentage

Fixed cost 1,350,000.00


BEP (in units) = 5,000.00
CM/unit 270.00
Fixed cost 1,350,000.00
BEP (in pesos) = 4,500,000.00
CM % 0.30
Required 3 Required 4
Original Proposal Per unit Percentage
7,200,000.00 8,100,000.00 810.00 9,315,000.00
5,040,000.00 6,300,000.00 630.00 0.7778 7,245,000.00
2,160,000.00 1,800,000.00 180.00 0.2222 2,070,000.00
1,350,000.00 1,350,000.00 1,350,000.00
810,000.00 450,000.00 720,000.00

units (desired Fixed cost + desired profit


profit) = CM/unit
sales (desired Fixed cost + desired profit
profit) = CM %
2,070,000.00
11,500.00
180.00
2,070,000.00
9,315,000.00
0.22
Operating Leverage

Required 1:
Sales 18,000,000.00
Less: Variable Costs 12,600,000.00
Contribution Margin 5,400,000.00
Less: Fixed Cost 4,500,000.00
Net Income 900,000.00

Contribution Margin 5,400,000.00


Operating Leverage = 6.00
Net Profit 900,000.00

Required 2:
A.
% Increase in NI = OL * % increase in sales 22,500,000.00
6 * 25 15,750,000.00
150.00 % 6,750,000.00
4,500,000.00
2,250,000.00

B.
NI for next year = NI (current) + Increase in NI
900,000 + 900,000(1.5)
2,250,000.00
Multi-product Breakeven Analysis

Required 1
Model E700 Model J1500 Total Model E700 Model J1500
Sales 700,000.00 300,000.00 1,000,000.00 665,000.00 285,000.00
Less: Variable Costs 370,000.00
Contribution Margin 420,000.00 210,000.00 630,000.00 399,000.00 199,500.00
Less: Fixed Costs 598,500.00
Net Profit 31,500.00

Required 2:
Fixed Costs 598,500.00
BEP (multi-product) 950,000.00
WCM % 0.63

Model E700 Model J1500


Sales Mix 0.70 0.30
Multiply by: CM% 0.60 0.70
0.42 0.21 0.63
Total
950,000.00
351,500.00
598,500.00
598,500.00
0.00
Breakeven Analysis: Target Profit: Margin of Safety

Required 1:
Fixed Costs 150,000.00
BEP (units) 12,500.00
CM/unit 12.00
Fixed Costs 150,000.00
BEP (peso sales) 500,000.00
CM % 0.30

Required 2:
150,000.00

Required 3:
Target profit + Fixed costs 168,000.00
Sales (target 18000) 14,000.00
CM/unit 12.00

Sales 560,000.00
Less: Variable Costs 392,000.00
Contribution Margin 168,000.00
Less: Fixed Costs 150,000.00
Net Profit 18,000.00

Required 4:
Margin of Safety = Sales - BEP
600,000 - 500,000
100,000.00

Margin of safet 100,000.00


Margin of safety % 0.17
Sales 600,000.00

Required 5:
Sales 680,000.00
Less: Variable Costs 476,000.00
Contribution Margin 204,000.00
Less: Fixed Costs 150,000.00
Net Profit 54,000.00

Increase in NP 24,000.00

You might also like