Transcript If a seller sold a product at Tk. 50 If cost is Tk. 40

Muhammed Samsuzzaman
E mail: [email protected]
Senior Teacher
Kakoli High School
School E mail: [email protected]
Web address: www.kakolihighschool.com
Let’s watch the picture
What is your evaluation?
One is laughing by
making
profit
Today’s Lesson
Profit Planning Analysis
Learning Outcomes
1.
2.
3.
4.
Speak about profit/loss
Understand about BEP
Clear concept about Fixed & Variable costs.
To know about profitable business or margin
of safety.
If a seller sold a product at Tk. 50
If its cost is Tk. 40
Find out profit?
Tk. 10
Rough and Solution
Profit = Sales price – Cost price
Oppositely
Loss = Cost – sales
Cost
1. Fixed cost
2. Variable cost
Rent
Material
Salary
Labor
Insurance
Factory OH
SP
Sales price per unit
VC
Variable cost per unit
CM
Contribution Margin per unit
Lenovo company sold a product
at Tk. 20 , its variable Cost per
unit Tk. 12 and Fixed cost Total
Tk. 20,000
SP
Sales price per unit
Tk. 20
VC
Variable cost per unit
Tk. 12
CM
Contribution Margin per unit
Tk. 8
CM
=
SP
-
VC
So we find that Tk. 8 is earn from
one unit. It is not profit. Carefully
think that we deduct only variable
cost. Fixed cost totally denied. But
we have to deduct fixed cost to find
out actual profit . Fixed cost is Tk.
20,000 . How many units need to
sale to cover this fixed cost Tk.
20,000?
Tk 8 earn from 1 unit
Tk 20,000 earn from __________ unit
Yes!
2500
unit
Tk. 20,000
Fixed cost
Tk. 8
Contribution margin
per unit
Fixed cost
Break even point =
Contribution margin
per unit
Income statement for 2500 unit
Sales (2500X20)
Less , Variable cost(2500 X 12)
= 50,000
= 30,000
Contribution Margin = 20,000
Less , Fixed Cost
Profit
= 20,000
=0
So, we found that Break Even Point (BEP) is a point
where no profit and no loss.
60,000
Taka
50,000
40,000
30,000
20,000
FC
10,000
0
0
500
1000
1500
Unit
2000
2500
3000
Evaluation
Sales per unit Tk. 60 Variable per unit Tk. 40 , Fixed Cost
Tk. 80,000 .
i) What Is CM?
ii) What is Break even point and Break even sales?
iii) If the company wants to make profit Tk. 20,000. How
many unit must be sold?
CM = SALES PER UNIT – VARIABLE COST PER UNIT
= 60 – 40 = 20
BEP = FC / CM per unit = 80,000 / 20 = 4000 unit.
Break even sales = 4000 unit X 60 = 2,40,000.
Target sale = ( FC + Desire Profit)/ CM per unit
= (80,000+ 60,000) / 20 = 7,000 unit
Home work
Optical company sold a unit at Tk. 100 ,
its variable Cost per unit Tk. 80 and Fixed
cost Total Tk. 1,20,000.
i) Find out BEP ?
Ii) If The Company wants to make a
Profit Tk. 60,000 how many unit must be
sold?
Iii) Draw a break even chart.
Thanks To All .
Sales Tk. 50
Tk.?10
Cost Tk. 40 Profit
After showing this, please click here to return Back to Main slide