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Cost volume profit analysis
1. Management Accounting
Prof. Hafiz Zafar Ahmad
Qamar Farooq
Hailey College of Commerce
E-mail:pakarmy009@hotmail.com
Cost Volume Profit Analysis
(CVP Analysis)
2. Management Accounting
Cost Volume Profit Analysis (CVP Analysis)
It is a planning study.
Under Marginal Costing
Types of Analysis
Breakeven Analysis (No Profit & No loss)
profit volume Analysis
Formulas:
1. Breakeven Point (Volume):
TC= TR
FC = All fixed cost
Contribution = Sales – All variable cost
2. Breakeven Point (value):
i.
ii.
3. Sales volume to earn target profit:
Qamar Farooq (M.com 2012-2016) Morning
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3. Management Accounting
4. Sales value to earn target profit :
i.
ii.
5. Margin of safety: MOS, MS
MOS= Budgeted sales – Breakeven point
MOS Ratio = MOS/Budgeted sales ×100
Relationships:
1. variable and contribution :
Sales – variable cost = contribution
Sales – contribution = variable cost
If variable cost 40% of sales then 60% contribution of sales.
2. Breakeven and Mos
Sales – Breakeven = MOs
Sales - MOs = Breakeven point
Lecture Given by:
Prof.Hafiz Zafar Ahmad
Hailey College of Commerce
Qamar Farooq (M.com 2012-2016) Morning
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