Chapter 3 CVP
Chapter 3 CVP
Chapter 3 CVP
Cost-Volume-Profit Analysis
Operating income
= Total revenues from operations
– Cost of goods sold and operating costs
(excluding income taxes)
Net income = Operating income – Income taxes
Variable Fixed
Sales – expenses = expenses
SP = Selling price
VCU = Variable cost per unit
CMU = Contribution margin per unit
CM% = Contribution margin percentage
FC = Fixed costs
Proof:
Revenues: 4,822 × $70 $337,540
Variable costs: 4,822 × $42 202,524
Contribution margin $135,016
Fixed costs 84,000
Operating income 51,016
Income taxes: $51,016 × 30% 15,305
Net income $ 35,711
©2003 Prentice Hall Business Publishing, Cost Accounting 11/e, Horngren/Datar/Foster
3/7/2015
Using CVP Analysis Example