Nothing Special   »   [go: up one dir, main page]
Scribd Logo
Upload

Welcome to Scribd!

  • 127 views

    S-MATH311LA BSM31 1st Sem (2021-2022) - 1st Sem AY2021-2022

    Uploaded by

    Von Andrei Medina
    1) The document discusses cost-volume-profit analysis and break-even analysis using a sample problem. It defines fixed costs, variable costs, revenue, and profit models. 2) The sample problem provides details on a company's fixed costs, variable costs per unit, and selling price per unit to calculate the cost, revenue, and profit models. 3) Using these models, the document calculates that the company will break even and make $0 profit when it sells 2,500 units.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    S-MATH311LA BSM31 1st Sem (2021-2022) - 1st Sem AY2021-2022

    Uploaded by

    Von Andrei Medina
    127 views2 pages
    1) The document discusses cost-volume-profit analysis and break-even analysis using a sample problem. It defines fixed costs, variable costs, revenue, and profit models. 2) The sample problem provides details on a company's fixed costs, variable costs per unit, and selling price per unit to calculate the cost, revenue, and profit models. 3) Using these models, the document calculates that the company will break even and make $0 profit when it sells 2,500 units.

    Original Description:

    Original Title

    S-MATH311LA BSM31 1st Sem ( 2021-2022 ) - 1st Sem AY2021-2022 -

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    1) The document discusses cost-volume-profit analysis and break-even analysis using a sample problem. It defines fixed costs, variable costs, revenue, and profit models. 2) The sample problem provides details on a company's fixed costs, variable costs per unit, and selling price per unit to calculate the cost, revenue, and profit models. 3) Using these models, the document calculates that the company will break even and make $0 profit when it sells 2,500 units.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    127 views2 pages

    S-MATH311LA BSM31 1st Sem (2021-2022) - 1st Sem AY2021-2022

    Uploaded by

    Von Andrei Medina
    1) The document discusses cost-volume-profit analysis and break-even analysis using a sample problem. It defines fixed costs, variable costs, revenue, and profit models. 2) The sample problem provides details on a company's fixed costs, variable costs per unit, and selling price per unit to calculate the cost, revenue, and profit models. 3) Using these models, the document calculates that the company will break even and make $0 profit when it sells 2,500 units.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    S-MATH311LA BSM31 1st Sem ( 2021-2022 ) - 1st Sem AY2021-202... https://dlsud.edu20.org/student_lesson/show/2795121?lesson_id=130...

    S-MATH311LA BSM31 1st Sem ( 2021-2022 )


    Introduction to Management Science

    Model Development and the Cost-Volume-Profit Model


    Immersive Reader

    Models Used in Business and Economics


    Cost Model or Cost-Volume Model C(x)
    ◦ represents the cost of producing x of units of the commodity.
    ◦ represents the cost of manufacturing or producing a product as a function of the quantity or volume produced.
    ◦ Fixed Cost (FC) is a portion of the total cost that does not depend on the production quantity. It remains the same no matter
    how much is produced.
    ◦ Variable Cost (VC) is a portion of the total cost that depends on and varies with the production quantity or volume.

    COST = FIXED COST + (VARIABLE COST x QUANTITY OF OUTPUT)


    C(x)=FC+VC(x)
    Revenue Model R(x)
    ◦ represents the revenue obtained from selling x units of the commodity.
    REVENUE = UNITS SOLD x SELLING PRICE
    R(x) = xp(x)
    Profit Model or Profit-Volume Model P(x)
    ◦ represents the profit obtain from selling x units of the commodity.
    PROFIT = REVENUE - COST
    P(x) = R(x) - C(x)
    One of the most important criteria for management decision making is profit.
    Using the Cost-Volume-Profit Analysis and the Breakeven Analysis provides a model showing the loss or profit based on the
    amount of units or quantity produced.
    Breakeven occurs when total revenue is equal to total cost and at this condition the total profit is zero.
    P(x) = R(x) - C(x) = 0

    R(x) = C(x)
    SAMPLE PROBLEM
    A company is planning to manufacture a certain product. The fixed cost will be Php500,000 and it will cost Php400 to produce
    each product. Each will be sold for Php600.
    questions answers
    a. Determine the cost‐volume model for producing x units of each product. C(x)=500000+400x

    b. Determine the revenue model for producing x units of each product. R(x)=600x

    c. Determine the profit‐volume model for producing x units of each product. P(x)=200x-500000

    d. How many units must be sold in order to break even? 2500 units

    Given: Fixed Cost = 500,000


    Variable Cost = 400
    Selling price per unit = 600

    a. Find: Cost-Volume model C(x)


    Solution:
    C(x) = FC + (VC x Quantity of output)
    C(x) = 500,000 + 400x

    b. Find: Revenue R(x)


    Solution:
    R(x) = selling price per unit x units sold
    R(x) = 600x

    c. Find the BEP


    Solution:
    P(x) = R(x) - C(x)
    P(x) = 600x - (500,000 + 400x)
    P(x) = 200x -500,000

    1 of 2 13/09/2021, 12:06 pm
    S-MATH311LA BSM31 1st Sem ( 2021-2022 ) - 1st Sem AY2021-202... https://dlsud.edu20.org/student_lesson/show/2795121?lesson_id=130...

    Breakeven occurs when P(x) = 0


    0 = 200x - 500,000
    x = 2,500 units

    2 of 2 13/09/2021, 12:06 pm

    You might also like