FIN 305 Chapter Notes - Chapter M23B: Management Accounting
20 Nov 2016
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Cost & management accounting - cvp analysis ii: beyond b/e. Achieving b/e (breakeven) is a good target for startups and early stage ventures. Primary objectives: getting first sales to establish market segment, then growing sales. Beyond b/e: b/e = (nibt = 0) but founders and investors want more than that . Profit objective and target can be determined w/ help of cvp analysis. Taking formula nibt = q x ucm - tfc & qbe = tfc / ucm Target nibt = z >> 0 !!! (z is substitute for actual amount, aka result, you would want to see formula will tell what will need to happen in order to achieve it) Formula to find qty req. "d to be sold to meet target profit: Keep in mind: qty has to cover all fixed costs first! Qty miss: (46. 5 - 52) x 365 = - 2,007. 5 downloads - 2,000 rounded.
