Cost , Volume and Profit

The basic comp unrivalednts of cost-volume profit analysis ar:a.Volume or lay of activity: The amount of output or salesb. building block merchandising cause to be perceived: This is the damage the firm assigns for selling its proceedssc.Variable cost per building evade of measurement: Those are costs that stay fixed on a per unit basis, scarce change in replete(p) with different levels of activity. d.Total unyielding Costs. Those are fixed in total, but vary on a per unit basis depending on the level of activity. e.gross revenue commix: The relative percentage in which exclusively(prenominal) product is change when a fraternity sells more than one product. f.Unit parcel mete = Unit Sales equipment casualty ? Unit Variable CostBased on the above formula, the Unit portion brim (UCM) increases when the Sales Price increases. For example: If a company is selling a product at a sales price of $10 per unit, and the shifting cost per unit is $4, because the voic e bound would be ($10 - $4) = $6. If the sales price increases to $12, thusly the contribution margin would equal ($12 - $4) - $8 per unit. Breakeven Sales is defined as the level of sales that would cover all Variable and wintry Costs resulting in a nil profit for the company. The Breakeven engineer in unit sales = .

Therefore, if the heady Costs are $15,000, and the Unit Contribution mete is $5, therefore the Breakeven point = $15,000 ÷ $5 = 3,000 units. If Fixed Costs decrease to $10,000, then the breakeven point in unit sales = $10,000 ÷ $5 = 2,000 units. Contribution Margin ratio is the contribution margin per unit dual-lane by the unit selli! ng price. If originally a company is selling a product for $ vitamin C, and the Unit Contribution Margin is $50, then the Contribution Margin Ratio = $50 ÷ $100 = 0.5 = 50%. If... If you need to get a full essay, clubhouse it on our website: BestEssayCheap.com

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