Cost Volume Profit Analysis – harvard Referencing

  1. Google Image Result for http://images.vertex42.com/ExcelTemplates/break-even-point.gif. 2012. Google Image Result for http://images.vertex42.com/ExcelTemplates/break-even-point.gif. [ONLINE] Available at: http://www.google.com.au/imgres?imgurl=http://images.vertex42.com/ExcelTemplates/break-even-point.gif&imgrefurl=http://www.vertex42.com/ExcelTemplates/breakeven-analysis.html&usg=__N0grfat_uk-79f_S3QPcM3WehCo=&h=392&w=546&sz=9&hl=en&start=10&zoom=1&tbnid=BWOuXpjITkt8vM:&tbnh=95&tbnw=133&ei=OX9JUIWxI6yTiQfthYHgDA&prev=/search%3Fq%3Dbreak%2Beven%2Bpoint%26um%3D1%26hl%3Den%26safe%3Dactive%26sa%3DN%26biw%3D1680%26bih%3D900%26ie%3DUTF-8%26tbm%3Disch&um=1&itbs=1. [Accessed 07 September 2012].
  2. Breakeven Analysis – Charts – YouTube. 2012. Breakeven Analysis – Charts – YouTube. [ONLINE] Available at: http://www.youtube.com/watch?v=TLOo2mY6FIw. [Accessed 07 September 2012].
  3. Google Image Result for http://www.12manage.com/images/picture_break_even_chart.gif. 2012. Google Image Result for http://www.12manage.com/images/picture_break_even_chart.gif. [ONLINE] Available at: http://www.google.com.au/imgres?imgurl=http://www.12manage.com/images/picture_break_even_chart.gif&imgrefurl=http://www.12manage.com/methods_break-even_point.html&usg=__6kPDVOZs4k0nsguv-DrL1h27x3I=&h=302&w=447&sz=5&hl=en&start=1&zoom=1&tbnid=C9uqSz04aXL02M:&tbnh=86&tbnw=127&ei=OX9JUIWxI6yTiQfthYHgDA&prev=/search%3Fq%3Dbreak%2Beven%2Bpoint%26um%3D1%26hl%3Den%26safe%3Dactive%26sa%3DN%26biw%3D1680%26bih%3D900%26ie%3DUTF-8%26tbm%3Disch&um=1&itbs=1. [Accessed 07 September 2012].

Cost Volume Profit Analysis Part 2

Part 2 – Equations

Now, that I have introduced the basics of Cost Volume Profit Analysis, at Part 1. I’m going to introduce you to a new level the equation, the graphs, mainly what mathematician likes at an accounting topic. I’m going to introduced you to the meaning of each word in the equation first, so you wouldn’t be confuse of what am I saying in the formulas.

Elements of CVP

  • Fixed Costs ; “FC”
  • Variable Costs; “VC”
  • Number of units sold; “X”
  • Selling price per unit; “S”
  • Expectation profit; “P”
  • Break-even Units; “BU”
  • Total Revenue; “TR”
  • Total Variable Cost; “TVC”
  • Total Contribution Margin; “TCM”
  • Contribution Margin Per UNIT; “CMP”
  • Sale Unit; “SU”
  • Expect Profit “EP”
  • Variable cost per unit of contribution margin; “VCCM”

This are the words that would be in the equation that will solve the contribution Margin and Break-Even analysis of your Business.

Contribution Margin

I Introduced contribution margin first, because CM “contribution margin are included in break even analysis so you would understand where I get the contribution margin first than the break even analysis.

Contribution margin is the comparison of the profitability of different services or product your business or my business are offered

Formulas of Contribution margin

To find out your Total Contribution Margin.

The formula is:  TR –  TVC = TCM

Or in much  detail  Total Revenue

To find out your Contribution margin per unit.

The formula is:  S * VC = CMP

Or in much  detail Selling Price per unit subtracted to cost per unit resulting to contribution margin per unit.

Facts:

  • Break-even contribution margin must be equivalent to the fixed cost.
  • Contribution must cover a business fixed cost or not your business would be making a big loss.

Break Even Analysis

A break-even analysis in point of view is where the net income would be  zero. In my point of view break even point , it is like gravity no matter how high you will get you will come down, like break even it will always be zero.

Formulas of break even point

To find out your break- even point in units or “S”.

The formula is:  FC / (“S” * “VC) = Break even point  in units

Or in much  detail  Selling price multiply to variable cost then divide it to fixed Cost would you get your answer of getting the break Even point in units.

To find out your break- even point in numbers or “X”.

The formula is:  S * BU

Or in much  detail, Break-even units times by Selling price will get your results in Numbers or dollars.

To find out your sale (unit)

The formula is:  ( FC + EP) / ( SP – VCCM) = SU

Or in much detail, fixed cost addition to expect profit , then divide it to the result of selling price per unit subtracting to variable cost per unit of contribution margin resulting to your sale unit.

Visual of break even point


This is a video of break even analysis in more in a visual understanding , that can help you to understand much more better, because this help me understand much better. My explanation are words, but visual effect would make it for you to understand much clearer.

Hints for Break even Point

You gotta lower your break even  to gain faster profit, by this type of things increasing your selling price, reducing your fixed cost or variable cost. This ways can get your business running faster.

Why not increase Break even, in my opinion increasing break even would not make your business much better, you wouldn’t get a lot of revenue and your income would not be successful than before.

Graph

Why is graph important at break even point, it shows where your business would be making. This are example of graph that can get your head much clearer on , the situation and what are the results for to be put on the graph and see where your business is progressing or not going good.

In smaller Numbers

In bigger numbers.

This is my overall explanation of cost volume profit analysis, I hope you can understand what I am saying.

Cost Volume Profit Analysis

Glossary

I got to maintain the understanding of words that you would know about Cost Volume Profit or “CVP”, so I would be starting to introduce the keywords of the blog, and keep the flow going.

  1. Fixed Cost: That is held constant for a specified period of time.
  2. Sunk Cost: Money that has been spent and permanently lost.
  3. Margin: Difference between the market value of a collateral and amount of the loan advance against it.
  4. Variable Cost: A characteristic, number, or quantity that increases or decreases over time, or takes different values in different situations.
  5. Break Even Point: Point in time (or in number of unit sold) when forecasted revenue exactly equals the estimated total costs; where loss ends and profit begins to accumulate.
  6. Cost of Goods Sold: Alternative term for cost of sales.
  7. Operational Costs: Cost per unit of a product or service, or the annual cost incurred on a continuous process.
  8. Cost Control: the process or activity on controlling costs associated with an activity, process, or company.
  9. Revenue: The income generated from sale of goods or services, or any other use of capital or assets, associated with the main operations of an organization before any costs or expense are deducted.
  10. United: Definitive or determinate quantity adopted as a standard of measurement and exchange.
  11. Desired: Strongly wish for u want.
  12. Management Accounting: (Economics, Accounting and Finance/ Accounting and Book-keeping) another name for cost accounting.
  13. Cost: The amount that has to be paid or given up in order to get something.
  14. Expenses: Money Spent or cost Incurred in an organization’s efforts to generate revenue, representing the cost of doing business.
  15. Profit: The surplus remaining after total cost is deducted from total revenue, and the basis on which tax is computed and dividend is paid. It is the best known measure of success in an enterprise.
  16. Strategy: A method or plan chosen to bring about a desired future, such as achievement of a goal or solution to a problem.

 Business Costs –

To get an idea of business costs, here are the deeper meanings of the 3 main costs and graphs

Fixed Cost

In my definition it’s a cost that will remains in a constant payment. An example of Fixed cost are, salary, purchase of equipment, rent, Insurance.

Fixed Cost Behavior

Image

If you could see there are two different fixed costs; total fixed costs and Fixed cost per unit.

Total fixed costs is a line that would not change unless, there is a change like a rent, they bring up the rent prize because there’s new update or bring the rent down because its old and rusty.

Fixed Cost per Unit is  a formula  when you get your total fixed cost you divide that by units you sold therefore the line would never go up because its division.

 Variable Cost

Variable cost would be the cost that would not be expected on the business, the level of action would change. For an example of variable cost would be buying fuel, the fuel cost would go up depending on the situation of the search of fuel, so it’s not expected meaning it’s a variable cost.

Image

So as Variable cost it has two different variable cost, a total and per unit.

Total Variable cost is Variable cost per unit multiplied by unit sold, and that’s how you get the variable cost

Variable cost per unit is the same as the equation of fixed cost per unit it is; Total Variable cost divided to units sold.

Mixed Cost

Mixed cost is simple its just a mixture of  variable cost and fixed costs.

 Image

This is an example of  mixed cost can you see its a mixed cost of fix cost which is green and variable cost which is blue.

RIP BOXING (June 9 2012)

Wondering why? I said RIP Boxing, because if you’ve been watching the boxing match this month June 9 2012. Between Manny Pacquiao and Timothy Bradley, this match was imposturous, unfair, unelectable, unreliable, and undependable on how the judges selected Bradley as the winner. If you’ve watch the full fight, most of the judges voted that Manny Pacquiao was equal to Bradley’s strength even though Pacquiao nearly killed him with his fearful fast punches.

If you wan’t to see the match, this is the full highlight of the match.

Manny Pacquiao walked out undamaged while Bradley was sent to the ambulance badly damage resulting for him to be in a wheel chair. Manny Pacquiao was untouched, this matched was scripted, divesting point of view therefore the fate, love, fun, of boxing has died for me and for a lot of people has.I’m not just supporting Manny Pacquiao because his a Filipino like me or his an Asian like me, but it’s the point of view that this match has been overly not fair.

To back my points up this is a picture of how celebrities around the world think about this fight, their tweets from twitter.

Image

See how many celebrities tweeted about this match, its all negative, there ain’t no negative. The judges have really got no eyes to look what is wrong and what is right? The boxing for lots of people has died because of this unacceptable decision. At the end of this much lot’s of people walked out with different emotion, and according to a Philippines news, a man has died because of the decision that has been made, because of the cheating scheme they put through this.

I know how it’s not Bradly’s fault, but everyone has suggested to give the belt back. Bradley hadn’t lost a match, so maybe his part of this scripted play , that’s  just a chance he has, but because of his respond to the match video, this is what he said.

After reviewing the tape over 10 times. And listening to what all my fans and haters had to say about the fight. I have made a decision. I shall return this belt to its true rightful owner. LIKE AND SHARE if you support my decision. I shall release this information to the press and media shortly.

I hope he has actually given back belt to Pacquaio, but overall they are planning a rematch because of this unfaithful event. We all hope that boxing be ressurected from the death, because for me boxing has died because of this.

Threatening or Freezing Cold?

Threatening or Freezing Cold?

Threatening or Freezing Cold?

This is a picture of my friend, does he look bad? Does he look dangerous, does he look like his up or something? or maybe his just cold. It’s winter in Australia, or could be winter anywhere, or in whatever season, in whatever countries that might be cold. His all wrapped up, scarfed up, snapback on, his studio beats is on. He might look like his up for no good, but trust me he couldn’t hurt a bunny or a rabbit. In this propaganda, I’m trying to persuade that not everyone look threat full, even though they’re all wrapped up like an assassin ready to kill someone. I’m trying to persuade everyone that looks at other people as if they’re dangerous, even though they’re in a situation when they’re freezing so they’re all wrapped up. I’m trying to persuade adults, they live mostly everywhere. They dress with style, they work in a good manner workplace, and they spend their free time listening to classic or even rock, because this mainly affects the hip-hop industry (swag) vs. (style). Clothes can change people’s opinion about others, but you got to get to know them first before you assume they’re dangerous or contradict.

Is the Internet Killing the newspaper?

Let’s just go straight to the point! IT IS, because I don’t even touch the newspaper anymore. This is a new generation therefore; every old ways should be getting rid of because it’s dodgy for example the newspaper. For my personal experience none of my family doesn’t read newspaper instead their on the internet “clicking clicking clicking” none stopped comparing it to newspaper “next page next page” It actually got me dizzy something just folding silly paper noises ( that doesn’t just irritate me but people around me). If  It was internet you could watch, listen, read  (its free!) but when it comes to the newspaper read read read ( not free).

Outstanding performance rating and the useful of Internet, many people has used internet, for example in the toilet while you’re sitting there doing your job, or in the bus waiting to get home. It’s so popular but imagining newspaper nowadays to be use much often is un-imaginable for example “it’s like Hitler being in love with a black Jew homosexual person”. I don’t know if you agree with me or what if not you must be crazy, if you disagree with my opinion, you must be a newspaper writer. Newspaper are slow to be process, but internet is quicker in process , if paper where still popular and an army attack this country , the quickest way to get this information is by internet and not newspaper therefore! INTERNET IS KILLING THE NEWSPAPER!

Isn’t papers made out of from Tree?  Which are cut from the amazon forest or other forest that are being destroyed that effects the nature environment? How about? Internet electricity doesn’t affect much than the tree isn’t that right?. Therefore this is resulting to internet is really killing the newspaper due to the environmental way that has to be approach and treated nature to be delicate. Due to our resources of paper we got to stop making more paper meaning useless papers are supposed to be cut off or to killed equivalent to  making internet to kill the newspaper (end of story period).   

Imagine a World With One Language

Imagine a World with One Language

Imagine a world with just one language, there wouldn’t be any complication of understanding each other. You wouldn’t have to study another language because it was compulsory. People everywhere you could be able to understand. It would ease the way of living among us.

Image

At a positive side, there wouldn’t be any contradiction with other culture, trying to learn they’re language if you’re visiting or moving to another country. There wouldn’t be racism than before, for a true life story. When I was a kid back in London, African man shouted “ching chong wala ting tong” then made their eyes squint, when they see me or see me with my friends. Even though I wasn’t Chinese, anger confronted my feeling towards them, making me imagine a world with one language. Racism wouldn’t be overwhelmed as it is now.  Another positive side, when you are primary you are forced to learn another second language, for another example at Philippines I learned Tagalog and English, at London I learned Spanish and French. But outside the class you wouldn’t be able or even use all this language. If it was just one language we could understand each other, there would be only one language to be learned. There wouldn’t be pain for another student who isn’t interested to learn another language. Last positive side, English was my second language but although it wasn’t my strong language, it was Tagalog. My parents told me to speak Tagalog at home or I’ll get beaten up (JOKE) and I live in an English Country now for about seven years. But it’s still hard for me to learn English for a high level for college that’s why I dropped to accredited English. That affected me to an accredited package, but the world only has one language I wouldn’t have a complication or you wouldn’t have a complication to a language because you will speak it a lot of times and be fluent to it.

Putting it to a negative side if there was only language, the culture inheritage wouldn’t be amazing as it would be; language is a trademark of a country that represents our culture. It’s a way to detect your fellow country man and women, with these different types of languages. Plus even though it’s evil to use a language that other people doesn’t understand and you are rudely cussing them with your friends or families without them noticing. It is entertaining for us to do it because I do it and you do it without this it wouldn’t be fun with your culture to have a laugh with.  We wouldn’t make our other culture smile if it’s only one language, because if we learned other culture language and we communicate with them with this. We get closer to each other and become friends. Learning language is fun if you’re interested in to someone a girl or a boy just to get them they’re attention.

These are positive ideas and negative ideas that came out of my mind, there are so many ideas that can be announce about this topic, but overall.  In my opinion having one language is really amazing it could make my life easier so as everyone’s life easier.

By: Rossen De Ramos