Using Excel for cost-volume-profit (CVP) analysis Download an Excel temp/ate for this problem online in MyAccountingLab or at http://www.pearsonhigheredcom/Horngren. The Oceanside Garden Nursery buys flowering plants in tour-inch pots for $1.00 each and sells them for $2.50 each. Management budgets monthly fixed costs of $2,100 for sales volumes between 0 and 5,000 plants. Requirements Use the contribution margin approach to compute the company’s monthly breakeven point in units. Use the contribution margin ratio approach to compute the breakeven point in sales dollars. Use the contribution margin approach to compute the monthly sales level (in units) required to earn a target operating income of $5,000. Prepare a graph of the company’s CVP relationships. Include the sales revenue line, the fixed cost line, and the total cost line. Create a chart title and label the axes.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Using Excel for cost-volume-profit (CVP) analysis
Download an Excel temp/ate for this problem online in MyAccountingLab or at
http://www.pearsonhigheredcom/Horngren.
The Oceanside Garden Nursery buys flowering plants in tour-inch pots for $1.00 each and sells them for $2.50 each. Management budgets monthly fixed costs of $2,100 for sales volumes between 0 and 5,000 plants. Requirements
- Use the contribution margin approach to compute the company’s monthly breakeven point in units.
- Use the contribution margin ratio approach to compute the breakeven point in sales dollars.
- Use the contribution margin approach to compute the monthly sales level (in units) required to earn a target operating income of $5,000.
- Prepare a graph of the company’s CVP relationships. Include the sales revenue line, the fixed cost line, and the total cost line. Create a chart title and label the axes.
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