...accountant and reports to the controller, Jennifer Mackey. Bob has been performing routine types of accounting work, but he would like to become more involved in cost control and in analyses to help the managers make decisions. Recently, he performed a cost-volume-profit analysis of the company’s three products, as shown below. The analysis was based on data from last year’s accounting records. Prior Year Data | | Aggregate | Motor 15 | Motor 10 | Motor 5 | Sales at capacity (units) | 300,000 | | | | Actual volume (units) | 250,000 | 120,000 | 80,000 | 50,000 | Price per unit | $113.60 | $140.00 | $120.00 | $40.00 | Total revenue | $28,400,000 | $16,800,000 | $9,600,000 | $2,000,000 | Variable cost per unit | $85.60 | $125.00 | $62.50 | $28.00 | Total variable cost | $21,400,000 | $15,000,000 | $5,000,000 | $1,400,000 | Fixed costs | $6,000,000 | $900,000 | $4,500,000 | $600,000 | Operating profit | $1,000,000 | $900,000 | $100,000 | $0 | Ratios: | | | | | Variable cost to sales | 75.352% | 89.286% | 52.083% | 70.000% | Contribution margin ratio | 24.648% | 10.714% | 47.917% | 30.000% | Utilization of capacity | 83.333% | 40.000% | 26.667% | 16.667% | Breakeven point: | | | | | Units | 214,286 | | | | Revenues | $24,342,857 | | | | Total Revenue Total Revenue Total Cost Total Cost Bob asked Jennifer for an opportunity to present his CVP analysis at the next weekly managers’ meeting. Jennifer had used CVP in the past...
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...produces and sells three motors, named Motor 5, Motor 10, and Motor 15. Bob Noonan was recently hired as an accountant and reports to the controller, Jennifer Mackey. Bob has been performing routine types of accounting work, but he would like to become more involved in cost control and in analyses to help the managers make decisions. Recently, he performed a cost-volume-profit analysis of the company’s three products, as shown below. The analysis was based on data from last year’s accounting records. Prior Year Data Aggregate Motor 15 Motor 10 Motor 5 Sales at capacity (units) 300,000 Actual volume (units) 250,000 120,000 80,000 50,000 Price per unit $113.60 $140.00 $120.00 $40.00 Total revenue $28,400,000 $16,800,000 $9,600,000 $2,000,000 Variable cost per unit $85.60 $125.00 $62.50 $28.00 Total variable cost $21,400,000 $15,000,000 $5,000,000 $1,400,000 Fixed costs $6,000,000 $900,000 $4,500,000 $600,000 Operating profit $1,000,000 $900,000 $100,000 $0 Ratios: Variable cost to sales 75.352% 89.286% 52.083% 70.000% Contribution margin ratio 24.648% 10.714% 47.917% 30.000% Utilization of capacity 83.333% 40.000% 26.667% 16.667% Breakeven point: Units 214,286 Revenues $24,342,857 Bob asked Jennifer for an opportunity to present his CVP analysis at the next weekly managers’ meeting. Jennifer had used CVP in the past, but had not formally presented it to the managers. She asked Bob if he had updated the prior year’s information...
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...Outcome (LO) Mapping Task LO1 Analyse and interpret financial and managerial report for decision making. #1 #2 #3 Bloom’s Taxonomy LO2 Understand the basic concepts used in the preparation of financial statements. Critically assess the information relayed by financial reporting. Use financial information for financial and corporate strategy purposes. #4 Cognitive domain: Evaluation [High Order of Thinking Skills] Affective domain: Characterisation LO3 #5 #6 LO4 #5 #6 MBF 1213 Managerial Accounting – MBA Major Module July/August 2013 Assignment 1 1 CENTRE FOR POST GRADUATE STUDIES YOUR TASK: Limkokwing University of Creative Technology CASE STUDY: Cost Behaviour and Cost Volume Profit Analysis 1. Using the High-Low method to estimate the per-unit variable costs and total fixed costs. 2. Using the single product setting of the Cost-Volume-Analysis (CVP) to calculate the break-even point. 3. Use CVP analysis to calculate the break-even point. 4. Prepare an income statement for the company. 5. Calculate the company’s margin of safety 6. Calculation of product units to be sold for a target profit after cost increased INSTRUCTION TO PAIR ASSIGNMENT • This assignment, which carries 20 % of the total marks for the module, is compulsory for candidates attending the LUCT MBA programme. The general assessment criteria are Substance, Originality of work, Presentation, Use of illustrations / examples, where appropriate and will be assessed based on...
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...ON CVP ANALYSIS IN BANK Submitted to Dr. Harunur Rashid Professor Department of Accounting and Information Systems University of Chittagong Submitted by Md. Ariful Hoque B.B.A. (Hons.): 4th Year. Class Roll: 4541 Exam Roll: 2004 /42 Session: 2003-2004 Department of Accounting and Information Systems University of Chittagong Date of submission: August 25, 2009 Letter of Submission To Dr. Harunur Rashid Professor Department of Accounting and Information Systems University of Chittagong. Subject: Submission of Term Paper report on “CVP analysis in Bank.” Sir, With the greatest pleasure, I would like to submit my report on “CVP analysis in Bank” I have tried my best to gain practical experience and also tried to reflect the same in report with my limited scope and knowledge. I wish your hearty consideration, if there is any deviation in my report. I wish to thank for your friendly co-ordination to make the program success. Yours truly, ____________________ (Md. Ariful Hoque) B.B.A. (Hons.): 4th Year. Class Roll: 4541 Exam Roll: 2004 /42 Session: 2003-2004 Department of Accounting and Information Systems University of Chittagong PREFACE The Term Paper is a program that is common for the B.B.A. student. As students of the Commerce Faculty we got adventurous touch of the program under our department of AIS. The program...
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...accountant and reports to the controller, Jennifer Mackey. Bob has been performing routine types of accounting work, but he would like to become more involved in cost control and in analyses to help the managers make decisions. Recently, he performed a cost-volume-profit analysis of the company’s three products, as shown below. The analysis was based on data from last year’s accounting records. Prior Year Data | | Aggregate | Motor 15 | Motor 10 | Motor 5 | Sales at capacity (units) | 300,000 | | | | Actual volume (units) | 250,000 | 120,000 | 80,000 | 50,000 | Price per unit | $113.60 | $140.00 | $120.00 | $40.00 | Total revenue | $28,400,000 | $16,800,000 | $9,600,000 | $2,000,000 | Variable cost per unit | $85.60 | $125.00 | $62.50 | $28.00 | Total variable cost | $21,400,000 | $15,000,000 | $5,000,000 | $1,400,000 | Fixed costs | $6,000,000 | $900,000 | $4,500,000 | $600,000 | Operating profit | $1,000,000 | $900,000 | $100,000 | $0 | Ratios: | | | | | Variable cost to sales | 75.352% | 89.286% | 52.083% | 70.000% | Contribution margin ratio | 24.648% | 10.714% | 47.917% | 30.000% | Utilization of capacity | 83.333% | 40.000% | 26.667% | 16.667% | Breakeven point: | | | | | Units | 214,286 | | | | Revenues | $24,342,857 | | | | Total Revenue Total Revenue Total Cost Total Cost Bob asked Jennifer for an opportunity to present his CVP analysis at the next weekly managers’ meeting. Jennifer had used CVP in the past...
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...aims to provide an overview of key principles and concepts in financial accounting and managerial accounting. Specific topics include: components of financial statements; financial statements analysis; product costing; costvolume-profit analysis; and budgeting. Course Objectives After completion of the course, you should be able to: Understand the roles of financial accounting (external) and managerial accounting (internal) Analyze financial reports, specifically the balance sheet, statement of profit and loss and statement of cash flow. Identify and apply key financial ratios to financial statement analysis. Identify and apply basic elements of cost concepts, product costing and cost-volumeprofit (CVP) analysis to management decision-making process. Understand key considerations during the budgeting process and budgetary control. Course Materials Narayanswami (2014): “Financial Accounting: A Managerial Perspective”, Prentice-Hall Pvt Ltd., 5th edition, New Delhi (FA) Jiambalvo (2013):” Managerial Accounting”, Wiley India, 5th edition, New Delhi (MA) Supplemental materials will be distributed via email. Grading Criteria Your grade will be based on three criteria, as follows: Class Quizzes ( Best 4 out of 5) Business Report Group Presentation End-term exam Total Page 1 20% 10% 10% 60% 100% Course Outline Session No. Session 10-11 Session 12-13 Session 14 Session 15-16 Session 17-18...
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...BILL FRENCH CASE ANALYSIS Calamiong, Yna Marie Espejo, Jean Macabuhay, Minorka Salenga, Darlene Samia, Mark Valloyas, Hazel Marie BACKGROUND OF THE STUDY Bill French is a staff accountant at Duo Products Corporation. He has been doing routine types of analytical work and is reporting to his boss, Wes Davidson; a controller of the said company. French was a business school graduate and was considered by his associates to be quite capable and unusually conscientious. It was this latter characteristic that had apparently caused him to “rub some of the working folks the wrong way,” as one of his co-workers put it. French was well aware of his capabilities and took advantage of every opportunity that arose to try to educate those around him. Davidson’s invitation for Bill to attend an informal manager’s meeting had come as a surprise to others in the accounting group. However, when French requested permission to make a presentation of some breakeven data, Davidson agreed. Duo Products had not been making use of this type of analysis in its planning procedures. Basically, what Bill French had done was to determine the level at which the company must operate in order to break even. According to him, the company must be able to at least sell a sufficient volume of goods so that it will cover all the variable costs of producing and selling the goods. In addition to that, according to French, it will not make a profit unless it covers the fixed costs as well. The level of...
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...ch03.qxd 9/27/04 4:06 PM Page 86 CHAPTER Q1 Q2 Q3 Q4 Q5 Q6 Cost-Volume-Profit Analysis In Brief Managers need to estimate future revenues, costs, and profits to help them plan and monitor operations. They use cost-volume-profit (CVP) analysis to identify the levels of operating activity needed to avoid losses, achieve targeted profits, plan future operations, and monitor organizational performance. Managers also analyze operational risk as they choose an appropriate cost structure. This Chapter Addresses the Following Questions: What is cost-volume-profit (CVP) analysis, and how is it used for decision making? How are CVP calculations performed for a single product? How are CVP calculations performed for multiple products? What is the breakeven point? What assumptions and limitations should managers consider when using CVP analysis? How are margin of safety and operating leverage used to assess operational risk? ch03.qxd 9/27/04 4:06 PM Page 87 COLECO: FAULTY FORECASTS n the early 1980s, personal computers were still somewhat a novelty. At that time, Coleco manufactured a small computer called Adam. In addition, it sold Colecovision games for home computers. Coleco marketed Adam and its computer games heavily, hoping in 1982 for a hot seller during the Christmas and holiday gift season. However, Adam and Colecovision did not sell well. Coleco found itself close to bankruptcy. Then in 1983 Coleco purchased the license to manufacture Cabbage Patch Dolls. It began production...
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...Chapter Three 3 Fundamentals of Cost-Volume-Profit Analysis Orientation P A R T 1 LEARNING OBJECTIVES Preparing and Organizing Yourself After reading this chapter, you should be able to: for Success in College L.O.1 Use cost-volume-profit (CVP) analysis to analyze decisions. L.O.2 Understand the effect of cost structure on decisions. L.O.3 Use Microsoft Excel to perform CVP analysis. L.O.4 Incorporate taxes, multiple products, and alternative cost structures into the CVP analysis. L.O.5 Understand the assumptions and limitations of CVP analysis. C H A P T E R S I N P A R T O N E 1 2 Making Yourself Successful in College Approaching College Reading and Developing a College-Level Vocabulary Approaching College Assignments: Reading Textbooks and Following Directions 3 ✓ Related Resources See pages 000 to 000 of the Annotated Instructor’s Edition for general suggestions related to the chapters in Part One. 1 cor50782_ch01_001-072.indd 1 10/5/09 11:09:2 P A R T I opened U-Develop because I love photography and I wanted to own my own business. I now get to spend most of my day working with employees and customers making sure that the photos they take are the best they can be. It also gives me a chance to encourage younger people who have an interest in photography, because I work with many of the school groups and after-school clubs here in town. That’s the fun part of the job. But I also have to think about the financial side of the business. I need a systematic way to understand...
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...Fundamentals of Cost Accounting 3e William N. Lanen University of Michigan Shannon W. Anderson Rice University Michael W. Maher University of California at Davis FUNDAMENTALS OF COST ACCOUNTING Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY, 10020. Copyright © 2011, 2008, 2006 by The McGraw-Hill Companies, Inc. All rights reserved. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on acid-free paper. 1 2 3 4 5 6 7 8 9 0 WVR/WVR 1 0 9 8 7 6 5 4 3 2 1 0 ISBN MHID 978-0-07-352711-6 0-07-352711-4 Vice president and editor-in-chief: Brent Gordon Editorial director: Stewart Mattson Publisher: Tim Vertovec Director of development: Ann Torbert Development editor: Emily A. Hatteberg Vice president and director of marketing: Robin J. Zwettler Marketing director: Sankha Basu Marketing manager: Kathleen Klehr Vice president of editing, design and production: Sesha Bolisetty Senior project manager: Susanne Riedell Senior production supervisor: Debra R. Sylvester Interior designer:...
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...CHAPTER 7: COST-VOLUME-PROFIT ANALYSIS QUESTIONS 7-1 The underlying relationship in cost-volume-profit analysis is that costs, revenues, and profits all change in a predictable way as the volume of activity changes. 7-2 It is more practical to find the breakeven point in sales dollars for companies having thousands of individual items. Finding the breakeven point for each item would be laborious and meaningless. 7-3 The contribution margin ratio is: price - variable costs price The contribution margin ratio (CMR) represents the net contribution per sales dollar. The CMR tells us the change in profit associated with a given change in sales dollars. It is a useful measure of the relative contribution to profit of different products, divisions, or sales units. The use of this ratio can give a retail store a good approximation of the sales dollars necessary for the store to break even. A higher CMR is associated with higher risk. A higher CMR can have a more favorable impact on profit. However, if sales fall below breakeven, then a high CMR will yield a relatively more negative impact on profits. 7-4 The basic assumption of the CVP model is that the behavior of revenues and total costs is assumed to be linear over the relevant range of activity. Managers must be careful to remember that the calculations done within the context of a given CVP model cannot be interpreted safely outside...
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...CHAPTER 7: COST-VOLUME-PROFIT ANALYSIS QUESTIONS 7-1 The underlying relationship in cost-volume-profit analysis is that costs, revenues, and profits all change in a predictable way as the volume of activity changes. 7-2 It is more practical to find the breakeven point in sales dollars for companies having thousands of individual items. Finding the breakeven point for each item would be laborious and meaningless. 7-3 The contribution margin ratio is: price - variable costs price The contribution margin ratio (CMR) represents the net contribution per sales dollar. The CMR tells us the change in profit associated with a given change in sales dollars. It is a useful measure of the relative contribution to profit of different products, divisions, or sales units. The use of this ratio can give a retail store a good approximation of the sales dollars necessary for the store to break even. A higher CMR is associated with higher risk. A higher CMR can have a more favorable impact on profit. However, if sales fall below breakeven, then a high CMR will yield a relatively more negative impact on profits. 7-4 The basic assumption of the CVP model is that the behavior of revenues and total costs is assumed to be linear over the relevant range of activity. Managers must be careful to remember that the calculations done within the context of a given CVP model cannot be interpreted safely outside of the relevant range of output for that particular...
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...Summary of information on each course/module | |Name of Course/Module |Principles of Management Accounting I | | |Course Code |BAC1054 | | |Status of Subject |Foundation | | |MQF Level/Stage |Bachelor – MQF Level 6 | | |Note : | | | |Certificate – MQF Level 3 | | | |Diploma – MQF Level 4 | | | |Bachelor – MQF Level 6 | | | |Masters – MQF Level 7 | | | |Doctoral – MQF Level 8 | ...
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...[pic] SCHOOL OF ACCOUNTANCY UNIVERSITI UTARA MALAYSIA FIRST SEMESTER 2014/2015 (A141) COURSE CODE : BKAL3063 COURSE : INTEGRATED CASE STUDY PRE-REQUISITE : BKAF3073 FINANCIAL ACCOUNTING & REPORTING IV 1. SYNOPSIS This is a capstone course for the accountancy programs, which integrates knowledge from financial accounting & reporting, management accounting, taxation, audit, finance, management and business–related, information technology and other social sciences courses. Experiential exercises are embedded in this course to support learners’ effort in independent learning. 2. OBJECTIVES This course is designed to enable learners to integrate knowledge from the various related disciplines and to enhance their technical core competencies and their problem solving skills in the unstructured business environment. 3. LEARNING OUTCOMES Upon completion of the course, students are able to: i) interprete various accounting and business related issues in an organisational context. ii) undertake independent research. iii) develop alternative solutions to issues, devise action plans, and resolve implementation issues. iv) communicate ideas, views and recommendations effectively both verbally and in writing. v) demonstrate awareness of ethical considerations as part of the decision making process. vi) demonstrate leadership and teamwork in issues...
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...BGI COURSE SYLLABUS |Course Number and Title |MGT 553 Finance, Accounting, and the Triple Bottom Line I | | | | |Instructors |Kate Lancaster, PhD, CPA | | |kate.lancaster@bgi.edu | | |(W) 805.756.2922, (H-MB) 805.772.7452 | | |(H-BI) 206.780.1015, (C) 805.440.4618 | | |Toni Smith, PhD, CPA | | |toni.smith@bgi.edu | | |603.659.5108 | | |Brian Setzler, MBA, CPA | | ...
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