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Cost-Volume-Profit
Analysis
Dr Smita Sahoo
Two Approaches to Compute
Profits
Conventional
Conventional income
income statement
statement
Contribution
Contribution margin
margin income
income statement
statement
Cost of Gross
Sales – =
Goods Sold Margin
Variable Contribution
Sales – =
Overhead Margin
F ix ed C o sts
B E P=
C o n trib u tio n p er U n it
Dr. Smita Sahoo
Breakeven Point
40,000
35,000
line
30,000 Breakeven sales point u e
e v en
25,000 e s r
Sa l
Rupees
20,000 st l ine
l Co
15,000 Tota
10,000
5,000
Fixed Cost line
0
Rs. 300 500 1000
Units
June July
Units Units
Sales 12,800 11,000