VOLUME COST PROFIT ANALYSIS

Break-Even Chart/Volume Cost Profit (VCP) Graph The break even chart is a graphic relationship between volume, costs and profits. It shows not only the BEP but also the effects of cost and revenue at varying levels of sales. The break-even chart can, therefore, be...
VOLUME COST PROFIT ANALYSIS

Graphic Presentation Under the algebraic technique of break-even analysis, separate computations were needed to arrive at the above set of figures. The utility of the graphical technique is that such a set of figures can be determined without involving any separate...
VOLUME COST PROFIT ANALYSIS

Break-even Point TABLES Increasing the mix of high P/V products ( Y from 30 to 40 per cent, Z from 20 to 30 per cent) and decreasing the mix of a low P/V product (X from 50 to 30 per cent), the company can increase its overall profitability. In fact, it can further...
VOLUME COST PROFIT ANALYSIS

Multi-product Firms (Sales-mix) So far, we have confined our discussion to a one-product company. However, many manufacturers make more than one type of product. The relative proportion of each product sold in the aggregate sales is known as the sales-mix. A changes...
VOLUME COST PROFIT ANALYSIS

VCP Analysis and a Segment of the Business The fundamental approach of applying the VCP analysis to a segment of the business is the same as applying it to the business as a whole. The VCP approach may he applied to problems relative to individual product lines,...
VOLUME COST PROFIT ANALYSIS

Effects of Multiple Changes So far we have assumed that a change takes place in one of the three variable affecting profits – cost, price and sales volume. In cases where more than one factor is affected, the BEP analysis can he applied as shown below: [vfb...