【文章內(nèi)容簡介】 = Total fixed expense 27 Equation Method We calculate the breakeven point as follows: Sales = Variable expenses + Fixed expenses + Profits $500Q = $300Q + $80,000 + $0 $200Q = $80,000 Q = $80,000 247。 $200 per bike Q = 400 bikes 28 Equation Method We can also use the following equation to pute the breakeven point in sales dollars. Sales = Variable expenses + Fixed expenses + Profits X = + $80,000 + $0 Where: X = Total sales dollars = Variable expenses as a % of sales $80,000 = Total fixed expenses 29 Equation Method X = + $80,000 + $0 = $80,000 X = $80,000 247。 X = $200,000 We can also use the following equation to pute the breakeven point in sales dollars. Sales = Variable expenses + Fixed expenses + Profits 30 Contribution Margin Method The contribution margin method is a variation of the equation method. Fixed expenses Unit contribution margin = Breakeven point in units sold Fixed expenses CM ratio = Breakeven point in total sales dollars 31 Quick Check ? Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $ and the average variable expense per cup is $. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the breakeven sales in units? a. 872 cups b. 3,611 cups c. 1,200 cups d. 1,150 cups 32 Quick Check ? Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $ and the average variable expense per cup is $. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the breakeven sales in units? a. 872 cups b. 3,611 cups c. 1,200 cups d. 1,150 cups Fixed expenses Unit contribution margin Breakeven = $1,300 $ per cup $ per cup = $1,300 $ per cup = 1,150 cups = 33 Quick Check ? Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $ and the average variable expense per cup is $. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the breakeven sales in dollars? a. $1,300 b. $1,715 c. $1,788 d. $3,129 34 Quick Check ? Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $ and the average variable expense per cup is $. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the breakeven sales in dollars? a. $1,300 b. $1,715 c. $1,788 d. $3,129 Fixed expenses CM Ratio Breakeven sales = $1,300 = $1,715 = 35 Target Profit Analysis Suppose Wind Co. wants to know how many bikes must be sold to earn a profit of $100,000. We can use our CVP formula to determine the sales volume needed to achieve a target profit figure. 36 The CVP Equation Sales = Variable expenses + Fixed expenses + Profits $500Q = $300Q + $80,000 + $100,000 $200Q = $180,000 Q = 900 bikes 37 The Contribution Margin Approach We can determine the number of bikes that must be sold to earn a profit of $100,000 using the contribution margin approach. Fixed expenses + Target profit Unit contribution margin = Unit sales to attain the target profit $80,000 + $100,000 $200 per bike = 900 bikes 38 Quick Check ? Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $ and the average variable expense per cup is $. The average fixed expense per month is $1,300. How many cups of coffee would have to be sold to attain a target profit of $2,500 per month? a. 3,363 cups b. 2,212 cups c. 1,150 cups d. 4,200 cups 39 Quick Check ? Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $ and the average variable expense per cup is $. The average fixed expense per month is $1,300. How many cups of coffee would have to be sold to attain target profits of $2,500 per month? a. 3,363 cups b. 2,212 cups c. 1,150 cups d. 4,200 cups Fixed expenses + Target profit Unit contribution margin Unit sales to attain target profit $1,300 + $2,500 $ $ = $3,800 $ = 3,363 cups = = 40 Effect of ine tax ? Tax is paid on profit ? The CVP formulae use profit before tax ? Need to convert a target dollar profit after tax into the before tax amount by dividing it by 1 – the tax rate 41 Effect of ine tax m a r g i non c o n t r i b u t iU n i t