大学会计英语课件陈庆柏 主编978 7 81134 917 7unit 9.ppt

9.4 Break-Even Point and Break-Even Analysis 9.4.1 Break-Even Point Basic Techniques for Computing Break-Even Point or Performing Analysis CVP There are two basic techniques for computing a break-even point or doing cost-volume- profit analysis: contribution margin and equation technique. — Contribution Margin Technique — Equation Technique — Graphic Technique or Approach 9.4 Break-Even Point and Break-Even Analysis 9.4.2 Break-even Analysis This is a name given to a set of techniques which analyses the behavior of costs in relation to the level of business activity in an organization or a business and establishes the level required to break even, i.e. to make no loss and no profit. 9.5 Cost-Volume-Profit (CVP) Analysis 9.5.1 Definition CVP analysis refers to the study of the effects of out put volume on revenue (sales), expenses (costs), and net income (net profit). The managers of profit-seeking organizations (businesses) usually study the effects of output volume on revenue, expenses, and net in come. The managers of non-profit organizations also benefit from the study of CVP relationships. 9.5 Cost-Volume-Profit (CVP) Analysis 9.5.2 Ways of Performing CVP Analysis The above is a graph of CVP. The procedure for constructing such graph involves 5 steps as listed below: (1) Draw the axes. The horizontal axis is the sales volume, and the vertical axis is dollars of cost and revenue. (2) Plot sales volume. Select a convenient sales volume, say, 100,000 units and plot point A for total sales dollars at volume: 100,000×$0.50 = $50,000. Draw the revenue (that is, sales) line from point A to the origin, point O. (3) Plot fixed expenses. Draw the line showing the $6,000 fixed portion of expenses. It should be a horizontal line intersecting the vertical axis at $6,000, point B. 9.5 Cost-Volume-Profit (CVP) Analysis 9.5.2 Ways of Performing CVP Analysis The above is a graph of CVP. The procedure for constructing such graph involves 5 steps as listed below: (4)