Cost-Volume-Profit Analysis by Paulino Silva
15
COSTVOLUMEPROFIT ANALYSIS PAULINOSILVA RESEARCHER & UNIVERSITY LECTURER
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This presentation shows Cost-Volume-Profit Analysis Chart in a very detailed way. Total Costs are classified in Variable Costs and Fixed Costs. Breakeven point is obtained when Sales equals Total Costs.
Transcript of Cost-Volume-Profit Analysis by Paulino Silva
COST-‐VOLUME-‐PROFIT
ANALYSIS PAULINOSILVA
RESEARCHER & UNIVERSITY LECTURER
• Cost-‐Volume-‐Profit (CVP) Analysis is a very simplified and useful framework for short-‐term decision-‐making;
• The most important of the chart analysis is the point where Sales equals to Total Costs, that is called breakeven point;
• At this point there is no profit or loss.
CVP ANALYSIS
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CVP ANALYSIS ASSUMPTIONS
• Constant sales price; • Constant variable cost per unit; • Constant total fixed cost; • Constant sales mix; • Units sold equal units produced.
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CVP ANALYSIS ABBREVIATIONS
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FC Total Fixed Cost VC Total Variable Cost TC Total Cost S Sales Q* Breakeven point (in units) V* Breakeven point (in value)
Units
Value
CVP ANALYSIS CHART
5
FC
CVP ANALYSIS CHART
6
Value
Units
FC
VC
CVP ANALYSIS CHART
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Value
Units
FC
VC
TC
CVP ANALYSIS CHART
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Value
Units
FC
VC
TC S
CVP ANALYSIS CHART
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Value
Units
FC
VC
TC S
Q*
CVP ANALYSIS CHART
10
Value
Units
FC
VC
TC S
Q*
V*
CVP ANALYSIS CHART
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Value
Units
FC
VC
TC S
Q*
V*
CVP ANALYSIS CHART
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Value
Units
FC
VC
TC S
Q*
V*
Profit
CVP ANALYSIS CHART
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Value
Units
FC
VC
TC S
Q*
V*
Loss
Profit
CVP ANALYSIS CHART
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Value
Units
J THANK YOU VERY MUCH!
PAULINOSILVA www.paulinosilva.com
