This document discusses break-even analysis and contribution margin analysis for single and multiple product situations. It explains how to calculate the break-even point, prepare break-even charts, and apply the analysis to evaluate proposals and make short-term decisions. The document notes that basic break-even analysis works for a single product but multiple product analysis requires considering products together using charts that show them in sequence, with constant mix, or as a percentage of forecast sales.
This document discusses break-even analysis and contribution margin analysis for single and multiple product situations. It explains how to calculate the break-even point, prepare break-even charts, and apply the analysis to evaluate proposals and make short-term decisions. The document notes that basic break-even analysis works for a single product but multiple product analysis requires considering products together using charts that show them in sequence, with constant mix, or as a percentage of forecast sales.
This document discusses break-even analysis and contribution margin analysis for single and multiple product situations. It explains how to calculate the break-even point, prepare break-even charts, and apply the analysis to evaluate proposals and make short-term decisions. The document notes that basic break-even analysis works for a single product but multiple product analysis requires considering products together using charts that show them in sequence, with constant mix, or as a percentage of forecast sales.
This document discusses break-even analysis and contribution margin analysis for single and multiple product situations. It explains how to calculate the break-even point, prepare break-even charts, and apply the analysis to evaluate proposals and make short-term decisions. The document notes that basic break-even analysis works for a single product but multiple product analysis requires considering products together using charts that show them in sequence, with constant mix, or as a percentage of forecast sales.
• calculate the break-even point and output level required to meet income targets Summary • prepare a mulit-product break-even analysis including break-even and profit/volume charts, contribution • apply break-even analysis in multi-product contexts • explain the limitations of break-even analysis.
What you must know
• Breakeven analysis • Drawing a breakeven chart • Identifying and interpreting different types of breakeven charts • Interpreting a CVP chart
Unit synopsis • Breakeven analysis (CVP analysis) is the study of the effects on future profit of changes in fixed cost, va • The breakeven analysis can be done using: • a basic breakeven chart • the contribution breakeven chart • the profit-volume chart. • Costs are used for decision making. The category of decisions that can be made using costs are: • Short term decision https://lms.cimastudy.com/mod/scorm/player.php?a=1730¤torg=&scoid=3498&sesskey=4qEtjVwsEy&display=popup&mode=normal 1/2 1/14/2020 https://lms.cimastudy.com/mod/scorm/player.php?a=1730¤torg=&scoid=3498&sesskey=4qEtjVwsEy&display=popup&mode=normal • Short-term decision • Evaluation of proposals • The basic breakeven model can be used satisfactorily for a business operation with only one product. T with several products. • A multiple-product CVP analysis chart can be drawn based on different parameters considered togethe • A CVP chart with the products considered in sequence. • A CVP chart of sales with constant product mix. • A CVP chart with output as percentage of forecast sales and a constant product mix. • If a constant product mix is assumed then CVP calculations can be extended to multi-product situations
