Bài giảng môn Kế toán, kiểm toán - Chapter 7: Cost - Volume - profit analysis

Cost-Volume-Profit AnalysisChapter 7Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.The Break-Even PointThe break-even point is the point in the volume of activity where the organization’s revenues and expenses are equal.7-2Equation ApproachSales revenue – Variable expenses – Fixed expenses = ProfitUnitsalespriceSalesvolumein units×UnitvariableexpenseSalesvolumein units×($500 × X)($300 × X)––$80,000 = $0($200X)–$80,000 = $0X = 400 surf boards7-3Contribution-Margin Approach For each additional surf board sold, Curl generates $200 in contribution margin.Consider the following information developed by the accountant at Curl, Inc.:7-4Contribution-Margin Approach Fixed expenses Unit contribution margin =Break-even point(in units) $80,000 $200= 400 surf boards7-5Contribution-Margin Approach Here is the proof!400 × $500 = $200,000400 × $300 = $120,0007-6Contribution Margin RatioCalculate the break-even point in sales dollars rather than units by using the contribution margin ratio. Contribution margin Sales= CM Ratio Fixed expense CM RatioBreak-even point(in sales dollars)=7-7Graphing Cost-Volume-Profit RelationshipsViewing CVP relationships in a graph gives managers a perspective that can be obtained in no other way.Consider the following information for Curl, Inc.:7-8Cost-Volume-Profit GraphFixed expensesTotal expenses7-9Cost-Volume-Profit GraphFixed expensesTotal expenses7-10Cost-Volume-Profit GraphFixed expensesTotal expensesTotal sales7-11Cost-Volume-Profit GraphFixed expensesTotal expensesTotal salesBreak-evenpointProfit areaLoss area7-12Profit-Volume GraphSome managers like the profit-volumegraph because it focuses on profits and volume.Loss areaProfit areaBreak-evenpoint7-13Target Net Profit We can determine the number of surfboards that Curl must sell to earn a profit of $100,000 using the contribution margin approach. Fixed expenses + Target profit Unit contribution margin=Units sold to earnthe target profit $80,000 + $100,000 $200= 900 surf boards7-14Equation ApproachSales revenue – Variable expenses – Fixed expenses = Profit($500 × X)($300 × X)––$80,000 = $100,000($200X)= $180,000X = 900 surf boards7-15Applying CVP AnalysisSafety MarginThe difference between budgeted sales revenue and break-even sales revenue.The amount by which sales can drop before losses occur.7-16CVP Analysis with Multiple ProductsFor a company with more than one product, sales mix is the relative combination in which a company’s products are sold.Different products have different selling prices, cost structures, and contribution margins.Let’s assume Curl sells surfboards and sail boards and see how we deal with break-even analysis.7-17CVP Analysis with Multiple ProductsCurl provides us with the following: information:7-18CVP Analysis with Multiple ProductsWeighted-average unit contribution margin$200 × 62.5%$550 × 37.5%7-19CVP Analysis with Multiple ProductsBreak-even pointBreak-evenpoint= Fixed expensesWeighted-average unit contribution marginBreak-evenpoint= $170,000 $331.25 Break-evenpoint=514 combined unit sales7-20CVP Analysis with Multiple ProductsBreak-even pointBreak-evenpoint=514 combined unit sales7-21Assumptions UnderlyingCVP AnalysisSelling price is constant throughout the entire relevant range.Costs are linear over the relevant range.In multi-product companies, the sales mix is constant.In manufacturing firms, inventories do not change (units produced = units sold).7-22CVP Relationships and the Income Statement7-23CVP Relationships and the Income Statement7-24Cost Structure and Operating LeverageThe cost structure of an organization is the relative proportion of its fixed and variable costs.Operating leverage is:the extent to which an organization uses fixed costs in its cost structure.greatest in companies that have a high proportion of fixed costs in relation to variable costs.7-25 Measuring Operating Leverage Contribution margin Net incomeOperating leveragefactor= $100,000 $20,000= 57-26Measuring Operating LeverageA measure of how a percentage change in sales will affect profits. If Curl increases its sales by 10%, what will be the percentage increase in net income?7-27CVP Analysis, Activity-Based Costing, and Advanced Manufacturing SystemsAn activity-based costing system provides a much more complete picture of cost-volume-profit relationships and, thus, it provides better information to managers.Break-evenpoint= Fixed costsUnit contribution margin7-28A Move Toward JIT andFlexible ManufacturingOverhead costs like setup, inspection, and material handling are fixed with respect to sales volume, but they are not fixed with respect to other cost drivers.This is the fundamental distinction between a traditional CVP analysis and an activity-based costing CVP analysis.7-29Effect of Income Taxes Target after-tax net income 1 - t=Before-tax net incomeIncome taxes affect a company’s CVP relationships. To earn a particular after-tax net income, a greater before-tax income will be required. 7-30