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CVP Solman

This document provides examples of cost-volume-profit (CVP) analysis for multiple companies. It includes calculations to determine: 1) Break-even points and indifference points for Company A and B. 2) That the indifference point for sales is 166,666 units where profits are equal for both companies. 3) Other examples calculating sales levels, variable costs, contribution margins, fixed costs and profits at different levels.

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Ryan Prado Andaya
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98 views2 pages

CVP Solman

This document provides examples of cost-volume-profit (CVP) analysis for multiple companies. It includes calculations to determine: 1) Break-even points and indifference points for Company A and B. 2) That the indifference point for sales is 166,666 units where profits are equal for both companies. 3) Other examples calculating sales levels, variable costs, contribution margins, fixed costs and profits at different levels.

Uploaded by

Ryan Prado Andaya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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SOLUTIONS: CVP ANALYSIS

#1. AB Co. CD Co.


BEP-PESOS= 50000 70000
40% 52%
125,000.00 134,615.38 a

#2. indifference point let x=indifference point in sales


Fixed cost+Variable cost= Fixed cost+Variable cost
Fixed cost+VCR(X) = Fixed cost+VCRX)
50000+.6x = 70000+.48x
.6x-.48x = 70000-50000
0.12 x = 20000 20000/.12
x = 166,666.67 c 166,666.67

#3. d
Sales 166,666.67 166666.67
Variable cost 100,000.00 60% 80,000.00 0.48
CM 66,666.67 86,666.67
Fixed cost 50,000 70,000
Profit 16,666.67 16,666.67 d

#7 to 18
#7 Units Peso
SP 25 11000 275,000 100%
VC 15 165,000 60%
CM 10 110,000 40% a

#8
Pesos Units
Break even point 100000 100000
40% 10

250,000 10,000 c

#9.
Sales = FC+P 100000+20000
CMR 40%

120000 300,000
40%

FC+P 100000+20000
Cmu 10

120000 12,000 units


10

#10. units
Sales 25 13,000 325,000 a
VC 195,000 60%
CM 130,000 40%
FC 100,000
Profit before tax 30,000
Tax 9,000 30%
Profit after tax 21,000 70%
or
FC+oper.income FC+oper.income
10 40%

130000 130000
10 40%
= 13,000 325,000.00 a

#11.
Sales = FC+P 100000+.08S
40% 0.4
.4S-.08S = 100000
S = 100000
0.32
S = 312,500 b 3125000

#12.
Sales = FC + 2(S) 100000+2S
10
10S = 100000+2S

8S = 100000 100000
8
S = 12,500 units c

#13.
MS = Sales-BES

MS = 275000-250000
= 25,000 pesos a

Units Pesos
Ave. mo. Sales 11,000 275,000
less: BES 10,000 250,000
MS 1,000 25,000 a

#14.
MSR BESR
25000/275000 250000/275000
9% 91%
#15
units SP
Sales 11000 25 275,000
VC 165,000
CM 110,000 40%
FC 100,000
Profit 10,000

OLF = TCM 110,000


Profit bef. Tax 10,000

OLF = 11 b

#16 d
Increase in BEP= Increase in FC 20000
UCM 10
= 2,000 units
#17.
BEP FC 100000
UCM 5
20,000 units
25 selling price
BEP = 500,000 pesos a

#18.
SP 30
VC 15
CM 15

BEP FC 100000 = 6,666.67 units c


UCM 15

#20.
OLF = TCM or % change in profit befor tax
Profit befor tax % change in sales

5= % change in profit bef. Tax


900000-800000
5= % change in profit
100000/800000
5= % change in profit
0.125
62.5% = % change in profit a

#21
DOL = TCM
Profit

profit 300000/4 75,000


increase previous
Sales 100000 500000 400000
VC 40,000 200000 160000 0.4
CM 60,000 300000 240000 0.6
FC 180000 180000
Profit 120000 60000

% change in profit = % change in sales x DOL


100% = % change in salesx 4
100%/4 % change in sales
=
% increase in sales 25%
present sales 500000 125%
increase in sales (25%) 100000 25%
previous sales 400000 100%

OLF TCM
profit

4= 240000
profit
profit = 60,000

#22-#24
#22
Product 1 Product 2
UCM 6 4
multipled by: Sales mix
Product 1 - 3/5 60%
Product 2- 2/5 40%
WCM/u 3.6 1.6 5.20 a

#23

BEP-units = FC 234000
WCM/u 5.2
45,000
Product 1 Product 2
45000x60% 27,000 b
45000x40% 18,000 b

#24. Product 1 Product 2


Sales mix rate 60/108 56% 48/108 44%
xCMR (6/20) 30% (4/24) 16.67%
Weighted CMU 16.67% 7.41% 24.07%
Weighted average CMU rounded to 24% a
or
WACM/unit TCM
Total Sales
26
108 24%
Product 1 Product 2
Total Sales 3x20 60 2x24 48 108
VC 14x3 42 20x2 40
TCM 18 8 26

#25 to 27
#25
Sales 40000x50 2,000,000
Variable cost(40000x20) (800,000) -40%
Fixed costs (900,000)
Profit 300,000 b

#26
Let x=Selling price
Sales = VC+FC+Profit
40000x = {40000xP20)+900000+(20%(40000X)
= 800000+900000+8000X
40000x-8000x 1700000
32000 x 1700000
x = 53.125

#27 b

#28.
MS= Sales-BES
20000x120-900000 2400000-900000
1,500,000 pesos
12,500 units
MSR 1500000/2400000 62.50%

BES= FC 15x20000
CMR 1/3
300000
1/3
BES= 900000

#29. 100 units


SP 20 2000 20
VC 14 1400 16
CM 6 600 4
FC - assume 600

BES 600 increase 600


6 4
100 50 150
50/100 50%

#30 without raffle


BES= FC 120000
CMR 30%
400,000 d

#31 with the raffle


BES FC 120000+15000+10000
CMR 20%
SP Units
Sales 50 20,000 1,000,000
VC 35+5 20000 800,000
CM 200,000 0.2

BES= 145000 725,000 a


0.2

#32. w/o raffle with raffle


Sales(1000000x1.5) 1,000,000 1,500,000
VC (800000x1.5) 700,000 1,200,000
CM 300,000 300,000
FC 120,000 145,000
Profit 180,000 155,000
decrrease 25,000 c

#33.
w/o raffle With raffle
Sales(1000000x1.5) 1,000,000 2,525,000 a
VC (800000x1.5) 700,000
CM 300,000 505,000 20%
FC 120,000 145,000
Profit 180,000 360,000

#34. Sales BES MS


300000 180,000 120000
VC 80% 144,000
CM 36,000
FC 36,000 d
Budgeted
#35. Sales BESR=60% MS=40%
Sales 500000 300,000 200000
VC-70% 350000 210,000
CM 150,000 90,000
FC 90,000 90,000
Profit 60,000 -
b
Budgeted
#36 Sales BES MS
Sales 4.25 329375 263,500 65875
VC 1.20 93000 74,400 0.2823529
CM 189,100
FC 189,100
Profit 0

VC per unit 1.20 a

#37 SP
Sales 21,600,000 22,200,000 185 d
VC 19,800,000 19,800,000
CM 0.0833333333 1,800,000 2,400,000
FC 1,500,000 2,100,000
Profit 300,000 300000
Items 1-4

1. Break even points


AB CD
BEP= FC FC
CMR CMR

50,000 70,000
40% 52%
125,000 134,615.38 a

2. Indifference point let x= Indifference point in sales


Fixed cost+variable cost= Fixed cost+variable cost=
50000+.6X = 70000+.48x
.6x-.48X = 70000-50000
0.12 X = 20000
X = 20000/.12
X = 166,666.67 c

3. Profit at the indifference point


AB CD
Sales 166,666.67 166,666.67
VC 100,000.00 80,000.00
CM 66,666.67 86,666.67
FC 50,000.00 70,000.00
Profit 16,666.67 16,666.67 d

#7-#18. BB Corp.

#7. Per unit %


Sales 25
VC -15
CM 10 40% a

#8.
Units Peso
BEP FC FC
UCM CMR

100,000 100,000
10 40%
BEP 10,000 units 250,000 c

#9.
Units Peso
Target sales FC+ desired profit FC+ desired profit
UCM CMR

100000+20000 100000+20000
10 40%
= 12,000 units 300,000 d

#10.
Units Peso
FC+ desired profit FC+ desired profit
target sales UCM CMR

100000+(21000/.7) 100000+21000/.7)
10 40%
100000+30000 100000+30000
10 40%
= 130000 130000
10 40%
= 13,000 units 325,000 a

#11.
Target sales S= FC+ desired profit
CMR

S= 100000+.08(S)
40%
.4S = 100000+.08(S)
.4S-.08S = 100000
.32S 100000
S= 100000
0.32
S= 312,500 b

#12.
Target sales S= FC+ desired profit
CM/U

S= 100000+(2S)
10

10S= 100000+2S
10S-2S = 100000
8S = 100000
S = 100000/8
S = 12,500 units c

#13.
Units Pesos
Sales 11,000 275,000
BES 10,000 250,000
margin of safety 1,000 25,000 a

#14.
MSR BESR
25000/275000 250000/275000
9% 91% a

#15.
DOL or OLF= Total CM
profit befor tax

Sales 11000 25 275,000


Variable cost 15 165,000
CM 110,000
Fixed cost 100,000
profit befire tax 10,000

DOL or OLF= Total CM 110,000


profit befor tax 10,000
= 11 b

#16.
BEP-units = FC 120000
CM/U 10
= 12,000 units
10,000
increase in BEP units 2,000 units d
or
Increase in BEP= Increase in FC 20000
UCM 10
= 2,000 units

#17.
BEP-peso = FC 100,000
CMR 5/25 20%
New BEP 500,000 a
prev. BEP 250,000
increase in BEP 250,000

#18.
SP 30
VC 15
CM 15

BEP 100,000 6,666.67 c


15
#20.
% change in profit = % change in sales x DOL
= 100000/800000 x 5
0.125 x 5
% change in profit = 62.5% increase a

#21.

% change in profit = % change in sales x DOL


100% = % change in sales x 4
100%/4 = % change in sales
25% = % change in sales

Present sales 500,000 125%


increase 100,000 25%
previous sales 400,000 100%
Previous Increase Present
Sales 400,000 100,000 500,000
VC 160,000 40,000 200,000 40%
CM 240,000 60,000 300,000 60%
Fixed cost 180,000 180,000
Profit 60,000 120,000

#22. to 24

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