管理会计chapterPPT课件

1、Learning Objective 1第1页/共78页Basics of Cost-Volume-Profit AnalysisContribution Margin (CM) is the amount remaining from sales revenue after variable expenses have been deducted.第2页/共78页Basics of Cost-Volume-Profit AnalysisCM is used first to cover fixed expenses. Any remaining CM contributes to net o

2、perating income.第3页/共78页The Contribution Approach Sales, variable expenses, and contribution margin can also be expressed on a per unit basis. If Racing sells an additional bicycle, $200 additional CM will be generated to cover fixed expenses and profit.第4页/共78页The Contribution ApproachEach month, R

3、acing must generate at least $80,000 in total CM to break even.第5页/共78页The Contribution ApproachIf Racing sells in a month, it will be operating at the break-even point.第6页/共78页The Contribution ApproachIf Racing sells one more bike (), net operating income will increase by $200.第7页/共78页The Contribut

4、ion ApproachWe do not need to prepare an income statement to estimate profits at a particular sales volume. Simply multiply the number of units sold above break-even by the contribution margin per unit.第8页/共78页Learning Objective 2第9页/共78页CVP Relationships in Graphic FormThe relationship among revenu

5、e, cost, profit and volume can be expressed graphically by preparing a CVP graph. Racing developed contribution margin income statements at 300, 400, and 500 units sold. We will use this information to prepare the CVP graph.第10页/共78页-50,000100,000150,000200,000250,000300,000350,000400,000450,000-100

6、200300400500600700800CVP GraphUnitsDollars第11页/共78页-50,000100,000150,000200,000250,000300,000350,000400,000450,000-100200300400500600700800CVP GraphUnitsDollarsFixed Expenses第12页/共78页-50,000100,000150,000200,000250,000300,000350,000400,000450,000-100200300400500600700800CVP GraphDollarsUnitsFixed Ex

7、pensesTotal Expenses第13页/共78页CVP Graph-50,000100,000150,000200,000250,000300,000350,000400,000450,000-100200300400500600700800Fixed ExpensesDollarsTotal ExpensesTotal SalesUnits第14页/共78页CVP Graph-50,000100,000150,000200,000250,000300,000350,000400,000450,000-100200300400500600700800DollarsUnitsProfi

8、t AreaLoss Area第15页/共78页Learning Objective 3第16页/共78页Contribution Margin RatioThe contribution margin ratio is:For Racing Bicycle Company the ratio is: Total CMTotal salesCM Ratio = Each $1.00 increase in sales results in a total contribution margin increase of 40.= 40%$80,000$200,000第17页/共78页Contri

9、bution Margin RatioOr, in terms of units, the contribution margin ratio is:For Racing Bicycle Company the ratio is:$200$500= 40% Unit CMUnit selling priceCM Ratio = 第18页/共78页Contribution Margin Ratio第19页/共78页Quick Check Coffee Klatch is an espresso stand in a downtown office building. The average se

10、lling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the CM Ratio for Coffee Klatch?a. 1.319b. 0.758c. 0.242d. 4.139第20页/共78页 Coffee Klatch is an espresso stand in

11、a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the CM Ratio for Coffee Klatch?a. 1.319b. 0.758c. 0.242d. 4.139Quick

12、Check Unit contribution marginUnit selling priceCM Ratio =($1.49-$0.36)$1.49=$1.13$1.49= 0.758第21页/共78页Learning Objective 4第22页/共78页Changes in Fixed Costs and Sales VolumeWhat is the profit impact if Racing can increase unit sales from 500 to 540 by increasing the monthly advertising budget by $10,0

13、00?第23页/共78页Changes in Fixed Costs and Sales Volume第24页/共78页Changes in Fixed Costs and Sales VolumeThe Shortcut Solution第25页/共78页Change in Variable Costs and Sales VolumeWhat is the profit impact if Racing can use higher quality raw materials, thus increasing variable costs per unit by $10, to gener

14、ate an increase in unit sales from 500 to 580?第26页/共78页Change in Variable Costs and Sales Volume第27页/共78页Change in Fixed Cost, Sales Price and VolumeWhat is the profit impact if Racing (1) cuts its selling price $20 per unit, (2) increases its advertising budget by $15,000 per month, and (3) increas

15、es sales from 500 to 650 units per month? 第28页/共78页Change in Fixed Cost, Sales Price and Volume第29页/共78页Change in Variable Cost, Fixed Cost and Sales VolumeWhat is the profit impact if Racing (1) pays a $15 sales commission per bike sold instead of paying salespersons flat salaries that currently to

16、tal $6,000 per month, and (2) increases unit sales from 500 to 575 bikes? 第30页/共78页Change in Variable Cost, Fixed Cost and Sales Volume第31页/共78页Change in Regular Sales PriceIf Racing has an opportunity to sell 150 bikes to a wholesaler without disturbing sales to other customers or fixed expenses, w

17、hat price would it quote to the wholesaler if it wants to increase monthly profits by $3,000? 第32页/共78页Change in Regular Sales Price第33页/共78页Learning Objective 5第34页/共78页Break-Even AnalysisBreak-even analysis can be approached in two ways:1. Equation method2. Contribution margin method第35页/共78页Equat

18、ion MethodProfits = (Sales Variable expenses) Fixed expensesSales = Variable expenses + Fixed expenses + ProfitsOR第36页/共78页Break-Even AnalysisHere is the information from Racing Bicycle Company:第37页/共78页Equation Method We calculate the break-even point as follows:Sales = Variable expenses + Fixed ex

19、penses + Profits$500Q = $300Q + $80,000 + $0Where: Q = Number of bikes sold $500 = Unit selling price $300 = Unit variable expense $80,000 = Total fixed expense第38页/共78页Equation Method$500Q = $300Q + $80,000 + $0$200Q = $80,000 Q = $80,000 $200 per bike Q = 400 bikes We calculate the break-even poin

20、t as follows:Sales = Variable expenses + Fixed expenses + Profits第39页/共78页Equation Method The equation can be modified to calculate the break-even point in sales dollars.Sales = Variable expenses + Fixed expenses + ProfitsWhere: X = Total sales dollars 0.60 = Variable expenses as a % of sales $80,00

21、0 = Total fixed expenses第40页/共78页Equation Method X = 0.60X + $80,000 + $0 0.40X = $80,000 X = $80,000 0.40 X = $200,000Sales = Variable expenses + Fixed expenses + Profits The equation can be modified to calculate the break-even point in sales dollars.第41页/共78页Contribution Margin MethodThe contribut

22、ion margin method has two key equations.Fixed expensesCM per unit =Break-even pointin units soldFixed expenses CM ratio=Break-even point intotal sales dollars第42页/共78页Contribution Margin MethodLets use the contribution margin method to calculate the break-even point in total sales dollars at Racing.

23、Fixed expenses CM ratio=Break-even point intotal sales dollars第43页/共78页Quick Check Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300.

24、 2,100 cups are sold each month on average. What is the break-even sales in units?a.872 cupsb. 3,611 cupsc. 1,200 cupsd. 1,150 cups第44页/共78页 Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cu

25、p is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the break-even sales in units?a. 872 cupsb. 3,611 cupsc. 1,200 cupsd. 1,150 cupsQuick Check Fixed expensesCM per UnitBreak-even =$1,300$1.49/cup - $0.36/cup=$1,300$1.13/cup= 1,150 cups=第45页/

26、共78页Quick Check Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the break-even

27、sales in dollars?a. $1,300b. $1,715c. $1,788d. $3,129第46页/共78页 Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold

28、 each month on average. What is the break-even sales in dollars?a. $1,300b. $1,715c. $1,788d. $3,129Quick Check Fixed expensesCM RatioBreak-evensales $1,3000.758= $1,715=第47页/共78页Learning Objective 6第48页/共78页Target Profit Analysis The equation and contribution margin methods can be used to determine

29、 the sales volume needed to achieve a target profit. Suppose Racing Bicycle Company wants to know how many bikes must be sold to earn a profit of $100,000.第49页/共78页The CVP Equation MethodSales = Variable expenses + Fixed expenses + Profits$500Q = $300Q + $80,000 + $100,000$200Q = $180,000 Q = 900 bi

30、kes第50页/共78页The Contribution Margin Approach The contribution margin method can be used to determine that 900 bikes must be sold to earn the target profit of $100,000. Fixed expenses + Target profit CM per unit=Unit sales to attainthe target profit $80,000 + $100,000 $200/bike= 900 bikes第51页/共78页Qui

31、ck Check Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. How many cups of coffee would have to be sold to attain target profits of

32、 $2,500 per month?a. 3,363 cupsb. 2,212 cupsc. 1,150 cupsd. 4,200 cups第52页/共78页 Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. Ho

33、w many cups of coffee would have to be sold to attain target profits of $2,500 per month?a. 3,363 cupsb. 2,212 cupsc. 1,150 cupsd. 4,200 cupsQuick Check Fixed expenses + Target profitUnit CMUnit salesto attaintarget profit = 3,363 cups=$3,800$1.13$1,300 + $2,500$1.49 - $0.36 =第53页/共78页Learning Objec

34、tive 7第54页/共78页The Margin of SafetyThe margin of safety is the excess of budgeted (or actual) sales over the break-even volume of sales.Margin of safety = Total sales - Break-even salesLets look at Racing Bicycle Company and determine the margin of safety.第55页/共78页The Margin of SafetyIf we assume th

35、at Racing Bicycle Company has actual sales of $250,000, given that we have already determined the break-even sales to be $200,000, the margin of safety is $50,000 as shown.第56页/共78页The Margin of SafetyThe margin of safety can be expressed as 20% of sales.($50,000 $250,000)第57页/共78页The Margin of Safe

36、tyThe margin of safety can be expressed in terms of the number of units sold. The margin of safety at Racing is $50,000, and each bike sells for $500.Margin ofSafety in units= 100 bikes$50,000$500第58页/共78页Quick Check Coffee Klatch is an espresso stand in a downtown office building. The average selli

37、ng price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the margin of safety?a. 3,250 cupsb. 950 cupsc. 1,150 cupsd. 2,100 cups第59页/共78页 Coffee Klatch is an espresso stan

38、d in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the margin of safety?a. 3,250 cupsb. 950 cupsc. 1,150 cupsd. 2,1

39、00 cupsQuick Check Margin of safety = Total sales Break-even sales= 950 cups= 2,100 cups 1,150 cupsor950 cups2,100 cupsMargin of safety percentage = 45%第60页/共78页Cost Structure and Profit StabilityCost structure refers to the relative proportion of fixed and variable costs in an organization. Manager

40、s often have some latitude in determining their organizations cost structure.第61页/共78页Cost Structure and Profit StabilityThere are advantages and disadvantages to high fixed cost (or low variable cost) and low fixed cost (or high variable cost) structures.An advantage of a high fixedcost structure i

41、s that incomewill be higher in good yearscompared to companieswith lower proportion offixed costs.A disadvantage of a high fixedcost structure is that incomewill be lower in bad yearscompared to companieswith lower proportion offixed costs.第62页/共78页Learning Objective 8第63页/共78页Operating Leverage A m

42、easure of how sensitive net operating income is to percentage changes in sales.Contribution margin Net operating incomeDegree ofoperating leverage=第64页/共78页Operating Leverage$100,000 $20,000= 5At Racing, the degree of operating leverage is 5.第65页/共78页Operating LeveragePercent increase in sales10%Deg

43、ree of operating leverage 5Percent increase in profits50%Heres the verification!第66页/共78页Operating LeverageActual sales (500)Increased sales (550)Sales250,000$ 275,000$ Less variable expenses150,000 165,000 Contribution margin100,000 110,000 Less fixed expenses80,000 80,000 Net operating income20,00

44、0$ 30,000$ 10% increase in sales from$250,000 to $275,000 . . . . . results in a 50% increase inincome from $20,000 to $30,000.第67页/共78页Quick Check Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense

45、 per cup is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the operating leverage?a. 2.21b. 0.45c. 0.34d. 2.92第68页/共78页 Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the operating leverage?a. 2.21b. 0.45c. 0.34d. 2.92Quick Check Contribution marginNet operating incomeOperating leverage =$2,373$1,073= 2.21第69页/共