VOLUME ANALYSIS
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VOLUME ANALYSIS FC + IBT Required Volume Q= CMU Break-Even: BE= FC/CMU CMU = SP - VC Multiple Products: CM%=(S-VC)/S IBT = NI / (1-Tax Rate)
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VOLUME ANALYSIS. FC + IBT Required Volume Q= CMU Break-Even: BE= FC/CMU CMU = SP - VC Multiple Products: CM%=(S-VC)/S IBT = NI / (1-Tax Rate). Utilization. Breakeven Utilization: BU = BE / C C="Capacity" Required Utilization: RU = Q / C - PowerPoint PPT Presentation
Transcript of VOLUME ANALYSIS
VOLUME ANALYSIS
FC + IBT
Required Volume Q= CMUBreak-Even: BE= FC/CMU
CMU = SP - VC Multiple Products: CM%=(S-VC)/S
IBT = NI / (1-Tax Rate)
UtilizationBreakeven Utilization: BU = BE / C
C="Capacity"Required Utilization: RU = Q / CExpected Utilization: EU = EV / C
EV=Expected VolumeCommon values:
BU = 50-60% RU = 70-80% EU = Initially > RU or busted.
OperationsOperationsOperating Leverage: OL = CM / IBTMargin of Safety Ratio: S = (EV -
BE) / EV
Inverse of each other.Common Values OL about 4. S = 25%