MA25 - Multi-Product CVP - Sample Problem
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- เผยแพร่เมื่อ 25 พ.ย. 2024
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Module 7 examines CVP Analysis, also called Breakeven Analysis. We learn to computer the breakeven point in units and dollars, the margin of safety, degree of operating leverage, target profit analysis, and "What if?" Analysis. We also look at multi-product CVP.
My accounting class requires us to complete discussion posts. We're required to include TH-cam videos that helped us to better understand chapters we've struggled with. Your videos seem to continue to pop up within these discussions and have also helped me to gain knowledge about Accounting that I wasn't understanding with the resources given to me. Thanks!
great video! thank you
ty
Please if asked to compute the margin of safety for each unit, how do I solve it?
What if it is a factory (such as a furniture factory) that sells hundreds of products, what is the best way to approach distribution of fixed costs? still total fixed / weighted average of contribution margin? thank you Tony!
I think that's how you'd do it - Total Fixed/ weighted avg cm - even with tons of products!
I hope it is ok I emailed you my solution to a similar problem in my head..hoping I am thinking correctly! (determining the % price should be above variable cost per unit to break even for multiple products/costs) thank you@@Tony-Bell
Is multi departments to produce one product calculated the same for multi products ?
It really depends on the data - if Fixed costs are shared, then yes, but if they each have separate fixed costs, then you would calculate product costs separately.
Autotune at 10:11 was crazy satisfying
🤣
it does sounds like an auto tune edit! too funny... Looking forward to Tony's managerial accounting rock opera.
@@Tony-Bell
Quick question: why do you always round up and is this the standard?
Thanks!
It's a quirky thing with breakeven. If I calculate Breakeven of 333.3333 units - and I round properly - so I give an answer of 333 units, when you crunch the numbers, you are actually LOSING money. So at 333 units sold, it's a slight loss, and 334 units it's a slight profit - so it is MORE correct to say, you breakeven when you sell your 334th unit. Some profs are picky here, some are not. (I am not!)
@Tony-Bell Okay, thanks! This makes sense. As I was watching the video, I could see that on the three products, you were rounding up each one.. adding up to more than the initial calculation. However, by using your logic, it makes sense. (34.25 means you need more than 34 and therefore need 35)
@@danielroytanked2375 With breakeven, I always keep in mind that in reality, this is a planning tool. So if my breakeven point is 333.33 units based on estimated Fixed costs of $10,000 and CM of $30, I need to remember, in reality fixed costs won't be $10,000 exactly, they will be 10,274.23 (or $9,865.94). So while 333.33 seems very precise, the real world will be much less "clean" so worrying about whether I theoretically breakeven at 333 or 334 is the least of my worries. It's a nice number to have as a benchmark or planning tool, but it needn't be too precise. (In the real world. In accounting class, as a prof I'm looking for a specific answer!)
@@Tony-Bell Thanks very much! I'm presently doing the course and this is a great help!
wow, do you have hair in this video?
Haha - those were the days!
@@Tony-Bellhaha