> 下载该文档 (更多资料请加备考QQ群:202534086(报班优惠券发放)) Unit 7 Cost management 1. CVP analysis Key terms: Marginal costing 变动成本法(边际成本法) Cost-volume-profit (CVP) 本量利分析 Contribution margin 贡献边际,贡献毛益,贡献毛利 Margin of safety 安全边际 Variable cost 变动成本 Fixed cost 固定成本 Discretionary Fixed Cost 酌量性固定成本 Committed Fixed Cost 约束性固定成本 Key points: 1. CVP analysis is a means of learning how costs and profits behave in response to changes in the level of business activity. CVP analysis is often called break even analysis, in reference to the point at which total revenue exactly equals total cost. The break-even point may be defined as the level of activity at which operating income is equal to zero. CPV 分析也称为盈亏平衡分析。 盈亏临界点是企业收入和全部成本相等的经营状态,即企业所处的既不盈利也不亏损的状态。 2. The contribution margin is simply the amount by which revenue exceeds variable costs. 贡献边际=收入-变动成本 3. The dollar amount by which actual sales volume exceeds the break even sales volume is called the margin of safety. 安全边际是指正常销售额超过盈亏临界点销售额的差额。(它表明销售额下降多少企业仍不致亏损) 4. Measurement Measurement method of computation [size=10.5000pt]Contribution margin | [size=10.5000pt]Sales revenue-total variable costs | [size=10.5000pt]Unit contribution margin | [size=10.5000pt]Unit sales price- variable costs per unit | [size=10.5000pt]Contribution margin ratio | Unit sales price-variable costs per unit [size=10.5000pt]Unit sales price | [size=10.5000pt]Sales volume ( in units) | Fixed costs +target operating income [size=10.5000pt]Unit contribution margin | [size=10.5000pt]Sales volume ( in dollars) | Fixed costs +target operating income [size=10.5000pt]Unit contribution margin ratio | [size=10.5000pt]Margin of safety | [size=10.5000pt]Actual sales volume-break even sales volume |
Practice question 1: The budgeted annual output of a factory is 120,000 units. The fixed overheads amount to $40,000 and the variable costs are 50c per unit. The sales price is $1 per unit. Required: To calculate Margin of safety Margin of safety=Budgeted sales volume- breakeven point sales volume. = 120,000 units-80,000 units =40,000 units |
5. Sensitivity analysis Sensitivity analysis takes each uncertain factor in turn, and calculates the change that would be necessary in that factor before the original decision is reversed. Typically, it involves posing “what-if” questions. E.g. If initial investment increases by 18%, the project profit will be zero. If price falls by more than 2%, the project will make a loss. By using this technique it is possible to establish which estimates (variables) are more critical than others in affecting a decision. The usefulness of sensitivity analysis : w Sensitivity analysis can be used to assess the robustness of a strategy (project), will it continue to deliver its major benefit if some key variables change. w It provides management with more information than a single point estimate of an outcome. w It provides a range of predicted outcomes depending on change in key variable. w It considers risk and uncertainty by offering alternative scenario – increase realism and complexity. Practice question 2: A Company has estimated the following sales and profits for a new product which it may launch on to the market. Required: Analyze the sensitivity of the project. Solution: If Fixed cost ↑25%, Project will make a loss If material cost ↑10%, Project will make a loss If labor cost ↑20%, Project will make a loss If Price↓ 5%, Project will make a loss If volume ↓20%, Project will make a loss
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