成本与管理会计第67910章（双语教学使用）

Chapter Six,Cost-Volume-Profit Relationships,Learning Objective 1,Explain how changes in activity affect contribution margin and net operating income.,Basics of Cost-Volume-Profit Analysis,Contribution Margin (CM) is the amount remaining from sales revenue after variable expenses have been deducted.,Basics of Cost-Volume-Profit Analysis,CM is used first to cover fixed expenses. Any remaining CM contributes to net operating income.,The Contribution Approach,Sales, variable expenses, and contribution margin can also be expressed on a per unit basis. If Racing sells an additional bicycle, $200 additional CM will be generated to cover fixed expenses and profit.,The Contribution Approach,Each month, Racing must generate at least $80,000 in total CM to break even.,The Contribution Approach,If Racing sells 400 units in a month, it will be operating at the break-even point.,The Contribution Approach,If Racing sells one more bike (401 bikes), net operating income will increase by $200.,The Contribution Approach,We do not need to prepare an income statement to estimate profits at a particular sales volume. Simply multiply the number of units sold above break-even by the contribution margin per unit.,If Racing sells 430 bikes, its net income will be $6,000.,Learning Objective 2,Prepare and interpret a cost-volume-profit (CVP) graph.,CVP Relationships in Graphic Form,The relationship among revenue, cost, profit and volume can be expressed graphically by preparing a CVP graph. Racing developed contribution margin income statements at 300, 400, and 500 units sold. We will use this information to prepare the CVP graph.,CVP Graph,Units,Dollars,In a CVP graph, unit volume is usually represented on the horizontal (X) axis and dollars on the vertical (Y) axis.,CVP Graph,Units,Dollars,CVP Graph,Dollars,Units,CVP Graph,Dollars,Units,CVP Graph,Dollars,Units,Profit Area,Loss Area,Learning Objective 3,Use the contribution margin ratio (CM ratio) to compute changes in contribution margin and net operating income resulting from changes in sales volume.,Contribution Margin Ratio,The contribution margin ratio is:For Racing Bicycle Company the ratio is:,Each $1.00 increase in sales results in a total contribution margin increase of 40.,Contribution Margin Ratio,Or, in terms of units, the contribution margin ratio is:For Racing Bicycle Company the ratio is:,Contribution Margin Ratio,Quick Check ,Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the CM Ratio for Coffee Klatch? a. 1.319 b. 0.758 c. 0.242 d. 4.139,Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the CM Ratio for Coffee Klatch? a. 1.319 b. 0.758 c. 0.242 d. 4.139,Quick Check ,Learning Objective 4,Show the effects on contribution margin of changes in variable costs, fixed costs, selling price, and volume.,Changes in Fixed Costs and Sales Volume,What is the profit impact if Racing can increase unit sales from 500 to 540 by increasing the monthly advertising budget by $10,000?,Changes in Fixed Costs and Sales Volume,Sales increased by $20,000, but net operating income decreased by $2,000.,Changes in Fixed Costs and Sales Volume,The Shortcut Solution,Change in Variable Costs and Sales Volume,What is the profit impact if Racing can use higher quality raw materials, thus increasing variable costs per unit by $10, to generate an increase in unit sales from 500 to 580?,Change in Variable Costs and Sales Volume,Sales increase by $40,000, and net operating income increases by $10,200.,Change in Fixed Cost, Sales Price and Volume,What is the profit impact if Racing (1) cuts its selling price $20 per unit, (2) increases its advertising budget by $15,000 per month, and (3) increases sales from 500 to 650 units per month?,Sales increase by $62,000, fixed costs increase by $15,000, and net operating income increases by $2,000.,Change in Fixed Cost, Sales Price and Volume,Change in Variable Cost, Fixed Cost and Sales Volume,What is the profit impact if Racing (1) pays a $15 sales commission per bike sold instead of paying salespersons flat salaries that currently total $6,000 per month, and (2) increases unit sales from 500 to 575 bikes?,Change in Variable Cost, Fixed Cost and Sales Volume,Sales increase by $37,500, variable costs increase by $31,125, but fixed expenses decrease by $6,000.,Change in Regular Sales Price,If Racing has an opportunity to sell 150 bikes to a wholesaler without disturbing sales to other customers or fixed expenses, what price would it quote to the wholesaler if it wants to increase monthly profits by $3,000?,Change in Regular Sales Price,Learning Objective 5,Compute the break-even point in unit sales and sales dollars.,Break-Even Analysis,Break-even analysis can be approached in two ways: Equation method Contribution margin method,Equation Method,Profits = (Sales Variable expenses) Fixed expenses,Sales = Variable expenses + Fixed expenses + Profits,OR,Break-Even Analysis,Here is the information from Racing Bicycle Company:,Equation Method,We calculate the break-even point as follows:,Sales = Variable expenses + Fixed expenses + Profits,$500Q = $300Q + $80,000 + $0 Where: Q = Number of bikes sold $500 = Unit selling price $300 = Unit variable expense $80,000 = Total fixed expense,Equation Method,$500Q = $300Q + $80,000 + $0 $200Q = $80,000 Q = $80,000 $200 per bike Q = 400 bikes,We calculate the break-even point as follows:,Sales = Variable expenses + Fixed expenses + Profits,Equation Method,The equation can be modified to calculate the break-even point in sales dollars.,Sales = Variable expenses + Fixed expenses + Profits,X = 0.60X + $80,000 + $0 Where: X = Total sales dollars 0.60 = Variable expenses as a % of sales $80,000 = Total fixed expenses,Equation Method,X = 0.60X + $80,000 + $0 0.40X = $80,000 X = $80,000 0.40 X = $200,000,Sales = Variable expenses + Fixed expenses + Profits,The equation can be modified to calculate the break-even point in sales dollars.,Contribution Margin Method,The contribution margin method has two key equations.,Contribution Margin Method,Lets use the contribution margin method to calculate the break-even point in total sales dollars at Racing.,Quick Check ,Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the break-even sales in units? 872 cups b. 3,611 cups c. 1,200 cups d. 1,150 cups,Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the break-even sales in units? 872 cups b. 3,611 cups c. 1,200 cups d. 1,150 cups,Quick Check ,Quick Check ,Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the break-even sales in dollars? a. $1,300 b. $1,715 c. $1,788 d. $3,129,Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the break-even sales in dollars? a. $1,300 b. $1,715 c. $1,788 d. $3,129,Quick Check ,Learning Objective 6,Determine the level of sales needed to achieve a desired target profit.,Target Profit Analysis,The equation and contribution margin methods can be used to determine the sales volume needed to achieve a target profit. Suppose Racing Bicycle Company wants to know how many bikes must be sold to earn a profit of $100,000.,The CVP Equation Method,Sales = Variable expenses + Fixed expenses + Profits,$500Q = $300Q + $80,000 + $100,000 $200Q = $180,000 Q = 900 bikes,The Contribution Margin Approach,The contribution margin method can be used to determine that 900 bikes must be sold to earn the target profit of $100,000.,Quick Check ,Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. 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,Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. 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,Quick Check ,Learning Objective 7,Compute the margin of safety and explain its significance.,The Margin of Safety,The margin of safety is the excess of budgeted (or actual) sales over the break-even volume of sales.,Margin of safety = Total sales - Break-even sales,Lets look at Racing Bicycle Company and determine the margin of safety.,The Margin of Safety,If we assume that Racing Bicycle Company has actual sales of $250,000, given that we have already determined the break-even sales to be $200,000, the margin of safety is $50,000 as shown.,The Margin of Safety,The margin of safety can be expressed as 20% of sales.($50,000 $250,000),The Margin of Safety,The margin of safety can be expressed in terms of the number of units sold. The margin of safety at Racing is $50,000, and each bike sells for $500.,Quick Check ,Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the margin of safety? a. 3,250 cups b. 950 cups c. 1,150 cups d. 2,100 cups,Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the margin of safety? a. 3,250 cups b. 950 cups c. 1,150 cups d. 2,100 cups,Quick Check ,Cost Structure and Profit Stability,Cost structure refers to the relative proportion of fixed and variable costs in an organization. Managers often have some latitude in determining their organizations cost structure.,Cost Structure and Profit Stability,There are advantages and disadvantages to high fixed cost (or low variable cost) and low fixed cost (or high variable cost) structures.,An advantage of a high fixedcost structure is that incomewill be higher in good yearscompared to companieswith lower proportion offixed costs.,A disadvantage of a high fixedcost structure is that incomewill be lower in bad yearscompared to companieswith lower proportion offixed costs.,Learning Objective 8,Compute the degree of operating leverage at a particular level of sales and explain how it can be used to predict changes in net operating income.,Operating Leverage,A measure of how sensitive net operating income is to percentage changes in sales.,Operating Leverage,At Racing, the degree of operating leverage is 5.,Operating Leverage,With an operating leverage of 5, if Racing increases its sales by 10%, net operating income would increase by 50%.,Heres the verification!,Operating Leverage,10% increase in sales from $250,000 to $275,000 . . .,. . . results in a 50% increase in income from $20,000 to $30,000.,Quick Check ,Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the operating leverage? a. 2.21 b. 0.45 c. 0.34 d. 2.92,Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. 2,100 cups are sold each month on average. What is the operating leverage? a. 2.21 b. 0.45 c. 0.34 d. 2.92,Quick Check ,Quick Check ,At Coffee Klatch the average selling price of a cup of coffee is $1.49, the average variable expense per cup is $0.36, the average fixed expense per month is $1,300 and an average of 2,100 cups are sold each month. If sales increase by 20%, by how much should net operating income increase? a. 30.0% b. 20.0% c. 22.1% d. 44.2%,At Coffee Klatch the average selling price of a cup of coffee is $1.49, the average variable expense per cup is $0.36, the average fixed expense per month is $1,300 and an average of 2,100 cups are sold each month. If sales increase by 20%, by how much should net operating income increase? a. 30.0% b. 20.0% c. 22.1% d. 44.2%,Quick Check ,Verify Increase in Profit,Structuring Sales Commissions,Companies generally compensate salespeople by paying them either a commission based on sales or a salary plus a sales commission. Commissions based on sales dollars can lead to lower profits in a company.Lets look at an example.,Structuring Sales Commissions,Pipeline Unlimited produces two types of surfboards, the XR7 and the Turbo. The XR7 sells for $100 and generates a contribution margin per unit of $25. The Turbo sells for $150 and earns a contribution margin per unit of $18.The sales force at Pipeline Unlimited is compensated based on sales commissions.,Structuring Sales Commissions,If you were on the sales force at Pipeline, you would push hard to sell the Turbo even though the XR7 earns a higher contribution margin per unit.To eliminate this type of conflict, commissions can be based on contribution margin rather than on selling price alone.,Learning Objective 9,Compute the break-even point for a multiproduct company and explain the effects of shifts in the sales mix on contribution margin and the break-even point.,The Concept of Sales Mix,Sales mix is the relative proportion in which a companys products are sold. Different products have different selling prices, cost structures, and contribution margins. Lets assume Racing Bicycle Company sells bikes and carts and that the sales mix between the two products remains the same.,Multi-product break-even analysis,Racing Bicycle Co. provides the following information:,Multi-product break-even analysis,Key Assumptions of CVP Analysis,Selling price is constant. Costs are linear. In multiproduct companies, the sales mix is constant. In manufacturing companies, inventories do not change (units produced = units sold).,End of Chapter 6,Chapter Seven,Variable Costing:A Tool for Management,Learning Objective 1,Explain how variable costing differs from absorption costing and compute unit product costs under each method.,Overview of Absorptionand Variable Costing,VariableCosting,AbsorptionCosting,Quick Check ,Which method will produce the highest values for work in process and finished goods inventories? a. Absorption costing. b. Variable costing. c. They produce the same values for these inventories. d. It depends. . .,Which method will produce the highest values for work in process and finished goods inventories? a. Absorption costing. b. Variable costing. c. They produce the same values for these inventories. d. It depends. . .,Quick Check ,Harvey Company produces a single productwith the following information available:,Unit Cost Computations,Unit product cost is determined as follows:,Under absorption costing, selling and administrative expenses arealways treated as period expenses and deducted from revenue as incurred.,Unit Cost Computations,Learning Objective 2,Prepare income statements using both variable and absorption costing.,Income Comparison ofAbsorption and Variable Costing,Lets assume the following additional information for Harvey Company. 20,000 units were sold during the year at a price of $30 each. There were no units in beginning inventory. Now, lets compute net operatingincome using both absorptionand variable costing.,Absorption Costing,Variable Costing,Learning Objective 3,Reconcile variable costing and absorption costing net operating incomes and explain why the two amounts differ.,Comparing the Two Methods,We can reconcile the difference betweenabsorption and variable income as follows:,Comparing the Two Methods,Extended Comparisons of Income Data Harvey Company Year Two,Unit Cost Computations,Since there was no change in the variable costsper unit, total fixed costs, or the number ofunits produced, the unit costs remain unchanged.,Absorption Costing,Variable Costing,We can reconcile the difference betweenabsorption and variable income as follows:,Comparing the Two Methods,Comparing the Two Methods,Summary of Key Insights,Effect of Changes in Productionon Net Operating Income,Lets revise the Harvey Company example.,In the previous example,25,000 units were produced each year,but sales increased from 20,000 units in yearone to 30,000 units in year two.,In this revised example,production will differ each year whilesales will remain constant.,Effect of Changes in ProductionHarvey Company Year One,Unit product cost is determined as follows:,Unit Cost Computations for Year One,Absorption Costing: Year One,Variable Costing: Year One,Effect of Changes in ProductionHarvey Company Year Two,Unit product cost is determined as follows:,Unit Cost Computations for Year Two,Absorption Costing: Year Two,Variable Costing: Year Two,Comparing the Two Methods,Learning Objective 4,Understand the advantages and disadvantages of both variable and absorption costing.,Impact on the Manager,Opponents of absorption costing argue thatshifting fixed manufacturing overhead costsbetween periods can lead to faulty decisions.,These opponents argue that variable costing incomestatements are easier to understand because net operatingincome is only affected by changes in unit sales. Thisproduces net operating income figures that aremore consistent with managers expectations.,CVP Analysis, Decision Makingand Absorption costing,Absorption costing does not support CVP analysis because it essentially treats fixed manufacturing overhead as a variable cost by assigning a per unit amount of the fixed overhead to each unit of production.,Treating fixed manufacturing overhead as a variable cost can: Lead to faulty pricing decisions and keep-or-drop decisions. Produce positive net operating income even when the number of units sold is less than the breakeven point.,External Reporting and Income Taxes,To conform toGAAP requirements,absorption costing must be used forexternal financial reports in the United States.,Under the TaxReform Act of 1986,absorption costing must beused when filing income tax returns.,Since top executivesare usually evaluated based on external reports to shareholders,they may feel that decisionsshould be based on absorption cost income.,Advantages of Variable Costingand the Contribution Approach,Advantages,Variable versus Absorption Costing,Variable Costing and theTheory of Constraints (TOC),Companies involved in TOC use a form of variable costing. However, one difference of the TOC approach is that it treats direct labor as a fixed cost for three r